As Traditional Investors Get on Board, Let’s Remember The Bigger Picture

  • August 10, 2018

Jane King with Olga Feldmeier speaking about the Current State of Crypto.

Since the conversation began to evolve from Bitcoin to fintech and blockchain innovation, traditional investors’ ears have started to prick up. Despite a failure to globally agree on the best foot forward in regulation, crypto is coming to the mainstream. Key stock exchanges around the globe are finally getting on board — and it’s going to be an interesting ride.

The latest announcement from ICE, the parent company of the New York Stock Exchange, is sending quivers of anticipation throughout the crypto community. Could this be the long-awaited boost that propels Bitcoin into the public conscience? A global regulated platform to buy and sell digital assets backed by reputable global giants like BCG, Microsoft, Intercontinental Exchange, and Starbucks?

Since the shifting regulatory landscape has been keeping traditional investors at the gates, ICE’s Bitcoin futures exchange will surely serve to build confidence in an asset class previously marked by uncertainty. I personally expect that we’ll see a significant upward adjustment in Bitcoin price because of this.

And this isn’t the only exciting development. SIX is also introducing an integrated digital asset trading, settlement, and custody service which — once again — places Switzerland firmly on the innovation map.

We may not have been fast to launch a major cryptocurrency exchange like Coinbase or Bitfinex, but despite their six-year headstart, the SIX digital exchange is a category-breaking one.

The Problem with Cryptocurrency Exchanges so Far

While cryptocurrency exchanges have for the most part been unregulated or lax at best (almost 70 percent of exchanges and wallet providers fail to comply with KYC/AML protocols within their jurisdictions); ICE’s exchange will focus on regulatory compliance. And Switzerland’s own stock exchange is owned and managed by SIX.

This is significant since SIX is of course approved by the Financial Market Infrastructure (FMI), by FINMA, and by the Swiss National Bank. They will clearly seek to extend that same seal of regulatory approval to their ‘digital asset ecosystem’ (“SDX”). This will make it a world-first fully regulated digital asset exchange.

For anyone doubtful or even bearish on crypto, it can only be a positive sign that traditional financial institutions are at last moving into this space. SIX, as the stock exchange infrastructure for Switzerland, has the key experience needed to operate and maintain a mission-critical, scalable, and always on service that can provide trust and security to traditional investors. Just as ICE, as the parent company of the NYSE, has the trust, backing, and expertise to bring on the large investors.

Yet Switzerland Is Still Leagues Ahead on Cryptocurrency

Once again, I repeat my stance that the smaller countries will emerge victorious both in regulation and in encouraging innovation in the crypto space. While the announcement from ICE may delight the Bitcoin bulls, US regulation, for the most part, remains confused, divided, and potentially restrictive for other cryptocurrencies.

This type of instability, uncertainty, and regulatory confusion sends shockwaves through the traditional investment community. They simply cannot get involved in this kind of volatile environment.

The NASDAQ too appears to be involved in a clumsy dance with the crypto world, announcing its support for Bitcoin, Litecoin, and Stellar, as well as a partnership with Gemini earlier this year… But, when exactly is this all going to happen? During my interview with Jane King at Nasdaq, we converse about the future of cryptocurrencies and the approach being taken towards them.

One of the leading countries, Switzerland, has proven that stability and pragmatism are needed for this technology to thrive. As such we at Smart Valor are aiming to provide the first platform for tokenization and distribution of digital assets in a safe and compliant way, capitalizing on the crypto friendly regulatory environment in Switzerland and Lichtenstein.

Further Stock Exchange Developments

Despite the ground-breaking news from ICE and SIX, I still believe that Australia’s largest stock exchange The Australian Securities Exchange (ASX) moving to the blockchain by 2020 is even more significant. Beyond listing digital assets, they are fully embracing blockchain technology, implementing a blockchain-based post-trade system that will replace the Clearing House Electronic Subregister System they have now.

By using distributed ledger technology to manage the Australian financial market, the ASX predicts that they can add as many as 50 new features for traders, as well as make significant cost savings.

Their announcement in December of last year will make the ASX the world’s first major stock exchange to migrate to blockchain technology. And perhaps it should not have come as a surprise considering that the country’s stock exchanges were listing cryptocurrency exchanges as far back as 2014.

These are the types of ventures that are truly pushing the envelope — and these are the smaller population countries that are more agile and able to embrace the technologies of the future faster. This means the stock exchanges of the future, of course, but also the marketplaces of the future, and disintermediation that will cut out centralized authorities.

Traditional Investors Are Important but Remember the Bigger Picture

SIX CEO Jos Dijsselhof spoke out saying, “This is the beginning of a new era for capital markets infrastructures.” I am personally thrilled and excited to see Switzerland at the cutting-edge once more, and that things appear to be moving in the right way for Bitcoin in the US.

But, I also urge our investors and the cryptocurrency community at large to remember that this is just one small part of blockchain’s potential. The launch of exchanges like SIX and ICE can only be a good thing for Bitcoin and other digital assets to thrive, to finally win over the support of traditional investors, and hopefully, lead to further embracing of cryptocurrency around the world.

Yet, whereas incumbents only start to dip their toes into the crypto space, at SMART VALOR, we believe that innovation is about more than just listing digital assets. We’re dedicated to building the infrastructure of the future and allowing for the disintermediation of transactions. We’re creating a key technological layer that will enable trade without intermediaries — the incumbents and the banks.

Final Thoughts

SIX, ICE and other exchanges that follow them are created for institutional investors, banks, and brokers. The VALOR platform is about providing colorful new opportunities for individuals who want to invest in the future. We are not an exchange but a marketplace; an online investment platform.

Let’s remember that blockchain technology has arrived to dis-intermediate this space — not to add in extra layers of complexity.

If you enjoyed reading my this blog post, please give me a clap and even better follow me — many exciting things to come next, so stay tuned!