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November 10, 2020

In Conversation With

The state of crypto trading in the Asian markets with Matrixport

Featuring

Nisa Amoils spoke with Cynthia Wu and Daniel Yan, both of Matrixport, about the state of crypto trading in the Asian markets and structured products. Matrixport is a spinoff from blockchain and crypto mining giant Bitmain and offers digital asset financial services. The company is mostly focused on professional traders, but they are also developing a strategy for retail customers in the months to come. Daniel Yan, who is Matrixport’s chief operating officer, discussed part of that retail strategy, saying,

(18:37) “The futures product is much more natural for them because it is just a leveraged spot of that; just think from retail’s perspective, it’s a linear transformation. But options, given the linearity, it can get a little confusing. So at this moment, I think not only with us, with everyone, all the retail products in the cryptocurrency world, I think most of the retail customers, they understand how to use structured products to earn money, which is embedded with options. But it’s generally difficult for them to understand how to just use options as a product to trade and how to trade it. It’s generally, very few people know. So that is definitely a big workload we need to focus on in the next year in part of our retail strategy, that is we need to provide quality content to help retailers understand how to use this product.”

Cynthia Wu, head of business development and sales at Matrixport, talked about miners becoming more sophisticated in their hedging strategies, saying:

(20:03) – “As we are a spinoff from Bitmain and are quite familiar with mining communities globally, they are a very important part of our clientele. I would say that in the crypto mining space, all the miners are evolving really fast. I would say they’ve evolved at light speed compared to some traditional commodity miners. So not only mining operations but also in terms of their financial savviness. A lot of the miners both from China and in the West are picking up the idea of hedging and risk management…especially in the past year. I think after March 12, when markets crashed, a lot of the miners actually had a very hard hit. And they started to realize the importance to protect against the downside risk. So they started to adopt that mindset that they don’t mind paying a small cost to buy the insurance. And they understand the importance of being in the game for the long term, which means that they need hedging.”

Nisa also asked about China’s stance on cryptocurrency trading, in response to which Cynthia said,

(26:12) “I think in China crypto is always defined as a liquid asset and a virtual commodity but not money. So that’s a very important difference compared to some other jurisdictions, which I think tells a lot about the stance of the Chinese government. I would say that China has not prohibited crypto outright, and actually in November last year the authority of the Chinese government actually said that bitcoin mining will not be an illegal industry in the country, which I think gives relief to people worried about the sustainability of bitcoin mining in China. But China prohibits token funding and also trading platforms from engaging in…business between the legal tender of the country and the cryptocurrencies. So I think that’s still going to be the case going forward.”

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Gerelyn Terzo
Gerelyn caught wind of bitcoin in mid-2017 and after learning about the peer-to-peer nature of Satoshi's creation has never looked back. Previously she covered institutional investing and fintech for several major trade publications. Gerelyn resides in Verona, N.J.

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