Earlier this month, the crypto market breathed a sigh of relief when the bitcoin price began to soar, breaking above $5,000. One of the possible reasons for this was a massive movement of bitcoin across three exchanges which drew both interest and skepticism from market watchers.
We speak with Alessandro Papadopoulos, Head of Strategic Projects at UTRUST, the cryptocurrency payment solution, about his thoughts on the matter.
BR: While the idea of some large amount of mystery bitcoin sparking a market rally is interesting, just how realistic is the concept?
Allegedly, a 20,000 BTC order that was algorithmically managed across three different exchanges (Coinbase, Kraken and Bitstamp) was the reason for the recent market surge.
A large order such as this one in a relatively small market could potentially have this impact on the price. That being said, it is not the only factor pushing towards this market rally: Bitcoin fundamentals are only getting stronger, with higher trading volumes and lower volatility.
This “sudden” surge is a reflection of traditional Finance slowly coming to terms with the value of bitcoin. Reputable companies across the globe are also investing heavily in bitcoin and blockchain technology alike. Only last week, eToro launched their own crypto exchange and EY released “Nightfall” – a zero-knowledge proof blockchain transaction technology.
BR: Do you think such an effect could be replicated in the future?
The crypto market is still relatively young and a strong inflow of capital into the market as we saw in 2017 would trigger the price upwards.
On the other hand, the opposite effect could also occur: It is public knowledge that the top 2000 BTC addresses hold roughly 42% of the circulating supply. Any large selloff from these wallets could spark a strong downward movement in price.
That being said, most of these wallets have been accumulating BTC for the past few months and many believe we are likely to see bitcoin reach new highs towards the end of 2020.
BR: Do you think the volatility of the market drives away investors or simply creates a more interesting place to trade?
This really depends on your investment profile. The crypto market is not for the faint-hearted and if you are a risk-averse investor, then best stay away for the time being. It is clearly a very interesting place to trade, but it’s understandable that most investors are not comfortable with this level of volatility and risk.
The truth is that the market is becoming more mature and increased regulation has played an important role in giving it more credibility. Recent news about Bitfinex and Tether have caused a drop of over $10B in the crypto market cap, but we are quickly rebounding and despite the news, BTC is still trading above $5K as we speak.
BR: Your company deals in instant crypto transactions, which are getting increasingly faster than traditional payments (Ripple’s Cross-border Payments, for example). Do you think traditional firms will be able to keep up?
UTRUST is the leading cryptocurrency payment solution designed to modernize the finance and payments industry and solve the problems of traditional payment methods by offering instant transactions, buyer protection, and immediate crypto-to-cash settlements for the merchants.
Unless traditional firms embrace Blockchain technology (as some have already done), I don’t see them being able to compete in terms of speed, security and scalability in the future.
Many firms have failed in the past due to their inability to foresee new technological trends – in our case, innovation is what drives us and we will always be looking for ways to improve our value proposition with technological advancement.
BR: There has been increasing emphasis on customer protection in crypto, especially with the hacks that have taken place recently. How does your company address that for your customers?
As a payments solution, the safety of our customers and the security of our platform is our top priority. At UTRUST, we adhere to the highest industry standards in terms of security and compliance in order to ensure that our customer’s funds are protected. Not only that, we work alongside three different cybersecurity firms and we are audited on a regular basis.
Our buyer protection mechanism is also unique in the sense that we are the only cryptocurrency payment solution that protects buyers on online purchases and this is a crucial aspect for any payments platform.
BR: How do you think the balance can be struck between crypto as a currency and crypto as an investment tool?
Presently, crypto is being used more as an investment tool than as a currency. For crypto to be widely adopted as currency things need to be simplified to the point where buying and selling with cryptocurrencies becomes just as easy as doing so with any other traditional payment method. Payments need to be fast, secure and easily convertible to other currencies and this is exactly what we aim to achieve at UTRUST.
BR: Do you see long term price stability being achieved in the crypto world in the near future?
As the market matures, the volatility that you see today will slowly decrease until it eventually resembles that seen in more traditional markets.
The emergence of stable coins will play a key role in building the credibility of the cryptocurrency markets as they will encourage institutional and corporate users to adapt to this new financial paradigm more rapidly. Furthermore, these coins also serve as a catalyst for increased liquidity in the market.
