Boris: It was a very active trading day, Bitcoin price went up to $7200 but retreated back to the $6600 level. There are two news items that impacted the price. First is that the American institution Fidelity with its branch Fidelity Investments started working with cryptocurrencies. And the second positive item is that one of the American exchanges — Coinbase — opened an office in Dublin to compensate for possible problems caused by Brexit. Their main European office will remain in London but in order to support their expansion, they opened a new office in Dublin.
To understand, which of these news items is more important and has a longer-term impact we invited our old friend, Serg Gulko from XTRD.
Boris: Let’s try to compare which one of these two news items have a larger long-term impact on digital assets trading?
Sergii: Hello, Boris! First of all, I would like to comment on yesterday’s rally on the market. It happened because people tried to get rid of Tether. Several companies decided to “exit” back to Bitcoin, Ethereum, or any other asset. But the end goal was to have a zero Tether balance.
Regarding your question — we believe that the most impactful thing is the Fidelity announcement. I’m not very optimistic about the Coinbase move, because the current volume distribution clearly says that the United States is the biggest and most lucrative market.
Boris: Maybe they are trying to expand an existing business? Thing is that the article I found on Reuters says that the European market is growing very fast.
Sergii: Well, in Europe Coinbase will compete with HitBTC, BitStamp, and CEX.IO and I wish them good luck! Ironically, most of the exchanges I mentioned are trying to get into the US market. Why? Because the money is here.
Boris: Ok, let’s go back to Fidelity. How important is what they are doing in the scope of attracting more investors from Wall St into digital asset trading?
Sergii: This is very important! We are speaking about clearing for the last three or four months and now, finally, it’s happening. Players start to see a difference between custody and clearing. Basically, Fidelity is going to provide clearing services. Very likely that right now, at this moment, it’s an advertisement rather than an actual solution.
For example, our company XTRD is working with two traditional clearinghouses from the FX world. We are building a pilot project which involves clearinghouse, several exchanges, and XTRD as an intermediary. Our partners are no less reputable than Fidelity, but they decided to build the mechanism first and only after — make an announcement.
In general, Fidelity’s move is the next logical step. Once the industry will have rock-solid clearing we will definitely see big institutional players.