Traders Share Stories of Volatile Crypto Investing in Seoul
A group of battle-hardened crypto traders from Korea and overseas gathered in Seoul on Wednesday night to talk about key topics affecting the industry — and importantly, prices. Top of the issues they covered were when and if “institutional” investors would enter the space, and the quality of some of the blockchain projects seeking their money.
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Traders’ Battle Stories and Hard Lessons Learned
The traders and investors were speaking at the launch of a service called XRayTrade, a terminal-style system similar to Bloomberg Terminals that features programmable hotkeys, quick access to information and data, and live communication with other traders.
Korean traders (CoinPro CEO) John Pang and Remy Kim, both of whom hail from the “regular” trading world, told of their introduction to bitcoin and cryptocurrencies — “they almost cost me my marriage,” Pang said of crypto’s notorious price swings. Kim, CEO and founder of Blockchain Korea, was known as South Korea’s biggest bitcoin holder and marveled at how volumes in his country quickly supplanted China’s over the past year.
“I never thought those CNY figures were real,” Kim said.
“I don’t care which way the price goes, I’ll bet either way,” said Hayes, who has run bitcoin derivatives platform BitMEX since 2014. However, he noted, the volatility traders love has quietened down in recent times.
Chun took the rational path of recommending (some) traders shouldn’t ride the volatility at all, saying “the best thing you can do is not do anything.” He advised more cautious investors to pick “a portfolio that makes sense” and hodl. Pang, meanwhile, advised traders to stay away from leverage (which was met with much laughter) and recommended all traders and investors keep a diverse portfolio.
Where Are the Big Institutional Investors?
But where are the famed “institutional investors” (i.e: large banks and deep-pocketed group funds) that crypto enthusiasts have long awaited? Their entry intro the space is anticipated to drive all prices to the moon at last, yet most appear to be staying out.
Hayes was blunt: he doesn’t take comfort at the prospect of institutional investors jumping in. Traders were still at the mercy of their own good or bad decisions, whatever the price.
“Goldman Sachs isn’t gonna save your ass because you chose shitcoin A over B,” he said.
Pang said he’d long heard of demand for over-the-counter (OTC) services and crypto hedge funds, but he’d seen little evidence of them. Chun said there simply isn’t enough infrastructure for them to use yet — today’s exchanges are custodial, single-unit operators for which traders need to open separate accounts and hold various funding wallets. That’s unlike the regular trading world, where users maintain a brokerage account they use to make plays in various markets.
XRayTrade Provides a Familiar and Easy Interface
That’s part of the problem XRayTrade is attempting to solve. It’s giving users the opportunity to trade on multiple exchanges from a single interface, and one that more closely resembles what they’re used to. At its beta launch, BitMEX is the sole platform offered, though XRayTrade CEO Ali Beikverdi said the company is in discussion with several others and hopes to onboard them soon.
Another problem with exchanges today is security. The panel noted that users didn’t trust crypto trading exchanges to protect their money or private information, often with good reason. The panel noted that as watertight as wallet security claimed to be, many of the more notable thefts in Korea and elsewhere had resulted from malicious actions by insiders, and basic phishing attacks that targeted individual users using stolen customer data.
“I have a personal interest in stopping the madness right now,” said IBM’s Demeo, referring to the latest high-profile security incident involving Syscoin at popular platform Binance.
Repentant Former ‘Shitcoin Cheerleader’ Now Down on ICOs
The group also discussed the ICO craze, of which all were wary due to regulatory issues and overall quality of some of the projects. The market “has lots of bagholders” and insufficient liquidity, Chun said. Hayes said as far as dealing with regulators was concerned, “at the end of the day it’s about covering your own ass” and while agencies like the SEC and CFTC have often issued warnings, neither had moved to stop ICOs altogether. At the end of the day, it’s how much pull you have with certain jurisdictions that could determine whether your project counts as a legitimate or illegal investment.
Pang, who confessed he had been “a shitcoin cheerleader” in his early crypto days, said he was far more wary of their promises now. “Look at the names of the tokens on CoinMarketCap — it’s a joke! … how does anyone invest in a coin called ‘Deep Onion’?” he laughed.
“Stay away from the garbage… stay away from ICOs. I’ve yet to see that any of these guys are making real products. There’s so much crap.”
Despite the professional cynicism and trademark black humor that comes with volatility trading, all were optimistic about the future of useful cryptocurrencies — though in different ways. Demeo said IBM is taking particular interest in Stellar and supply chain trackers, while Shuttle Fund’s Chun said he wants “resiliency to human greed and behavior” to be a feature of investment-grade digital assets.
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Images and video via Jon Southurst, Bitsonline.