Coinin is the Korean blockchain media headquartered in Seoul, South Korea, it relies on industry head resources and community advantages to form a huge influence on the media. It is known as an upgraded version of the blockchain field 36Kr.
Coinin recently launched the "Blockchain in Korea" series in South Korea, visiting the top blockchain practitioners in South Korea and promoting exchanges and cooperation between China and South Korea. In the new phase of "Blockchain in Korea", Coinin invited Charles Yang, Head Trader of Genesis Block to talk about "New Changes of the OTC Market in 2019".
The 48th phase of the "Blockchain in Korea", Coinin invited Charles Yang, Head Trader of Genesis Block to talk about "New Changes of the OTC Market in 2019".
Charles Yang: Head Trader of Genesis Block， Charles’ responsibilities include educating new and prospective clients about cryptocurrency, and servicing accounts with his experienced team of traders. Utilizing his personal networks and experience as an institutional broker, Charles attracts tech leaders and cutting-edge investors to the emerging Genesis Block platform.
Allen: You are currently the head trader of Genesis Block. How did you connect with the blockchain industry? What are the changes you have been experienced in the blockchain perception since you joined this industry?
Charles: My original major was finance, and I started a career in securities brokerage companies and began to sell stocks. I used to be less interested in the crypto market, but as the Kimchi Premium increased, I was recommended to Genesis Block. At that time, I met the co-founders, Crypto OG, Clement Ip and realized the value of bitcoin.
Although the market has changed rapidly, it seems that it still pays too much attention to the shortcomings or the wrong parts. Compared to the infrastructure, everyone seems to pay more attention to the change of price. I think people in the blockchain industry should learn more and popularize the correct market education.
Allen: Please introduce the Genesis Block and its main businesses. What is the current progress of Genesis Block?
Charles: Our main business is: 1) OTC transactions, 2) cryptocurrency ATM, 3) hosting various events.
The founder started to operate the Chinese mining business in 2013, and accumulated many OTC channels during that period. The reason for the establishment of Genesis Block Hong Kong in the summer of 2017 is that Hong Kong lacks resources such as community and education. Therefore, we are the only Bitcoin Center in Hong Kong. We create the largest cryptocurrency community in Hong Kong through holding a variety of meetups every week. "The cryptocurrency ATM business is also growing and it has installed more than 35 machines in Hong Kong."
In any case, OTC + prop transactions account for the largest share of sales. Customers can trade with Genesis Block，we are also doing the arbitrage in China and Korea. The monthly turnover is about 150 billion. I think the key to the OTC business is the funding channel and the trust from the customers. Those two kind of the business are what we are focusing on.
Allen: Genesis Block not only faces competition from other OTC trading platforms, but also the exchanges have launched the OTC platform. What are the advantages of Genesis Block comparing with these competitors? What changes have occurred in the 2019 OTC market?
Charles: The situation of favoring OTC is better than we thought. If you compare with the existing finances, there is always a broker role, and most individual/institutional investors are used to accepting such services. The second advantage of OTC is deep liquidity (the discounted price of a larger quantity) and post trade settlement. Exchanges need funds to trade, and OTC generally settles both parties after pricing.
"The OTC industry is in intense competition like the exchanges. Without the Niche market, frankly speaking, it is also hard to survive. For more market share, the top OTC has the trend of lowering interest rates, the length of time, the number of companies. There will be less companies in the future. Fortunately, Genesis Block has a niche channel and has certain competitive advantages. In the USD market, it also supports many retail businesses and cash transactions. In addition, it plans to enter the RMB + KRW market.
Allen: Please tell us about the current competitive landscape of the OTC market in Asia. What are the characteristics of the markets in each country? As Asia's largest OTC platform, is it plan to expand the market beyond Asia?
Charles: I mentioned above, the competition of the OTC industry have intensified. Looking at the vision for the past two years, it is dangerous for companies to grow too fast. Genesis Block has strict control over recruitment metrics and now has no more than 20 employees. We are not only busy digesting the volume of transactions in the Asian market, but also preparing to improve the system. Currently, except Asia we are not considering any other markets.
South Korea, Hong Kong, China, and we are further considering the Japanese, Thailand, and Vietnamese markets.
Allen: It is said that Bitcoin's over-the-counter market is significantly larger than the global bitcoin market. Someone says that the market will not affect OTC over-the-counter trading, and some people say that OTC trading will grow whenever there is a crisis of confidence happen in the market. What kind of factors will affect the volume of OTC transactions in your opinion?
Charles: The size of the OTC market is really hard to speculate. Although there is open data on the trading desk, it is expected that the trading volume of P2P OTC will be large. The P2P transaction is a combination of buyers and sellers, and the broker collects the handling fee. I personally think that the main purpose of cryptocurrency is to transfer funds. Because of the privacy issue, people seem to prefer OTC than the exchange.
For example, due to political issues in the United States and China, the demand for funds to transfer from China seems to have risen sharply. In this case, there is a demand for cryptocurrency.
Allen: Over-the-counter trading is one of the most concealed modes of all digital currency trading models, always covered with a mysterious veil. Over-the-counter trading is approximately how many times that of floor trading? What kind of people are doing out-of-the-counter trading? How can the OTC trading platform play a role in attracting more institutional investors, including traditional institutions?
Charles: In any case, agencies/projects/High Net Worth individuals seem to use OTC desks for transactions frequently. Institutions refer to general legal entities and cryptocurrency funds.
Traditional institutions (annuities, etc.) will enter the blockchain industry in the near future. To do this, you also need to fulfill the following conditions: 1) compliance; 2) security infrastructure (based on custody + transactions); 3) insurance, although there are many things and improvement. (eg Bakkt, Fidelity, etc.)
OTC platform will act as a broker just like a securities company in the future. We expect professional surveys, marketing, transactions and other services to be of great value from the standpoint of investors.
Allen: Since Bitcoin fell below $3,600 in December last year, it has nearly tripled its price. It seems to be in a period of plunge and slow rise. How do you judge the next move on Bitcoin? Has a new round of "bull market" of the digital currency market arrived? What is your advice for small and medium investors?
Charles: I always think that I need to be modest when trading. No matter how you are good at looking charts and understanding fund flows and fundamentals, changes in coin prices are still difficult to predict. The main reason is the impact of large-scale transactions.
For example, at the beginning of April, when the market began to rise, I thought the role of the miner would be great. The mining market in China is the peak season in summer, especially in areas such as Sichuan province. Many mining people have signed electricity bills in advance. In addition, it is also the time for manufacturers such as Bitmain to launch new models. I think they can work together to push prices up and make FOMO.
Even Bitmain has announced the news of the IPO. Fish like us can't try to overcome this trend. If there is no clear internal information, I recommended you to invest in the medium and long term.
Allen: What is the latest activities and future plan of Genesis Block? In what ways does Genesis Block hope to cooperate with projects or institutions in China and South Korea?
Charles: Recently, we have established partnerships with many exchange offices. For example, if we have a partner in Tokyo, Japanese customers can withdraw cash in Tokyo. Although we are a Hong Kong company, we want to continue to expand our customer base in this way.
Secondly, just as we have signed a partnership with the Carry Protocol, our strategy is to become an OTC partner for multiple projects. From the standpoint of the project, a lot of consultations can be transferred to us, and it is more effective to gather liquidity than the weak market.
Allen: As a well-known person of the Korean blockchain, you may know a lot of outstanding practitioners in the blockchain industry. "Blockchain in Korea" interview program is launched by [Coinin], is dedicated to exploring high-quality blockchian projects and practitioners. Could you recomme
nd three honored guests to our program?
Charles: I recommend the below three guests.
1. Yoo Juyong CSO (DXM - Defi)
2. Sam Bankman-Fried CEO (Alameda / FTX Futures Exchange)
3. Leslie Tam, OTC head of Binance
Q1: How do you view about “Over-the-counter trading is the best way to launder money.”?
Charles: Everyone knows that money laundering occurs before the emergence of cryptocurrency. Not for all coins, but bitcoins and other public chains are really not suitable for money laundering. All records are retained and there are many companies that analyze the chain data. I think it would be better for the two sides to exchange cash in person. Most OTC platforms carefully manage KYC/AML. It's important to go on business longer than handling a strange no kyc deal.
Q2: Are you optimistic about Facebook's cryptocurrency plan Libra?
Charles: What impressed me the most after reading the Libra white paper was: 1) open source, 2) public chain. The advantage is that even it is not facebook, other clients (wallets) will appear. However, due to such characteristics, the government does not seem to like it and may not be able to launch it.
The more economically unstable, the more important the monetary policies are in those countries. If the citizens ignore these situations and transfer assets to the global cryptocurrency market then will cause confusion. I think there is a lot of pressure in the United States to stop the development of libra. In addition, it is obvious that I don't think it can be compared with Bitcoin, so it has no effect. (Of course, in addition to the industry's concerns)
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