Evgeny Gaevoy: The CEO of Wintermute and Liquidity Provider
Last year’s turbulence in the crypto market, which was marked by cyberattacks and growing uncertainty around the security of centralized platforms, has prompted a shift towards the OTC market. Wintermute CEO Evgeny Gaevoy believes that traders are now increasingly seeking alternative methods for trading and protecting their assets.
The trend of over-the-counter (OTC) trading is gaining traction within the market.
In a recent interview, Wintermute CEO Evgeny Gaevoy shared his insights on the evolving dynamics of the crypto market and his take on trading and safeguarding crypto assets. Wintermute is a major global player in algorithmic trading and a heavyweight in the digital asset arena. It not only manages OTC trading and supplies liquidity to more than 40 centralized and decentralized exchanges with its average daily trading volume in the billions, but it also backs early-stage Web3 ventures.
Wintermute CEO Evgeny Gaevoy Source: Youtube
A Shift in Activities
Evgeny Gaevoy detailed a growing trend in market activities.
“The preference for dealing on the over-the-counter (OTC) side of things, where markets are potentially better protected, is evident in the crypto community,”
he said.
But this shift is not confined to traders or the crypto community. Companies offering services in the crypto market are also gradually transforming.
Gaevoy mentioned that at Wintermute, they are noticing established players bowing out, paving the way for ambitious newcomers. The geographic focus is also shifting: as some American firms are downsizing their market footprint, European and Asian blockchain companies are stepping up. This is causing a shift in the competitive landscape.
As this evolves, the liquidity in centralized exchanges might experience ups and downs, but the overall market retains its resilience, competing to provide traders with more effective and safer trading alternatives.
“On the one hand, we see we definitely see a number of US-based competitors of ours pulling out of crypto markets completely. On the other hand, I can also see that, for example, European blockchain firms are scaling up. We see increased competition from outside Asia,” Gaevoy stated during the interview.
Challenges with Custody Services
Faced with the question of what actions crypto traders and ordinary cryptocurrency holders should take amid fluctuating markets and uncertain regulations, Evgeny Gaevoy offers a clear response: secure a custodian you can rely on.
Aligning with reputable custodians and prime brokers has risen to the forefront as traders aim to diminish risks and amplify security.
“So I think it's all about basically trusting your custodian. I think that the break this topic of custody also because it's NASDAQ news was quite interesting in that regard. This topic of custody will be a pretty big one over the next two years. Like it's not just this year and next year, but for the next ten years, even for crypto, because it's one of the key things to figure out and it's basically one of the key aspects of basically how a house blockchain would work,” Gaevoy said.
Crypto traders are increasingly turning to derivative products. Gaevoy notes that one advantage of cash-settled derivatives, such as those provided by Wintermute, is that they don't require conventional storage solutions. Derivatives can be settled in stablecoins, bypassing the need for intricate custodial mechanisms.
“This basically solves a lot of pain points currently for anyone who wants to get exposure to various crypto assets,” Gaevoy shares.
Clear regulatory guidelines in the US are becoming a critical factor for the crypto market. The existing uncertainty may lead some protocols and exchanges to limit access for US investors. Such restrictions could temporarily stifle the growth of the sector and restrict American investors' access to innovative options.
“So like we know protocols for the exchanges that they've just been completely closed off. And I think that trend will continue until we get this for greater clarity. And what you'll end up with is for us investors, for example, that is they will definitely be sidelined from like whatever new, exciting things happens in crypto,”
Gaevoy says.
Offshores and Security
Evgeny Gaevoy acknowledges that estimating the exact amount of money being transferred offshore can be tricky, particularly given the current bear market conditions. However, he pointed out that significant volume increases on platforms like Binance, especially when compared to their competitors, indicate a considerable flow of funds overseas. This trend signifies a growing trust and interest in alternative trading routes.
“Yeah, that'd be pretty tough to estimate and kind of separate from general bear market volume drop. But yeah, my guess would be, if you simply look at Binance volumes, for example. So that's one interesting point to look at,” the speaker highlighted.
Summarizing his thoughts, Gaevoy emphasized the increasing importance of secure and protected trading solutions in the cryptocurrency market. As the industry navigates through regulatory uncertainties, investors are turning to trusted custodians and exploring derivative products, opening up new opportunities. The landscape of the market is evolving, and different regions play unique roles in its future shaping. As the crypto community adapts to these changes, the quest for clear regulation and the emergence of secure storage solutions will be pivotal in guiding the sector's growth trajectory.
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