This week, we talk to Konstantin Anissimov, executive director of CEX.IO. Established in 2013, CEX.IO is a regulated multi-functional cryptocurrency exchange with over 4 million registered users worldwide.
The ongoing public hysteria surrounding the crypto market means CEX.IO is at the epicentre of an ever-changing financial landscape, and is consequently very well-positioned to comment on the current state of affairs involving cryptocurrencies.
On the podcast
As one of the few FCA (Financial Conduct Authority) registered cryptocurrency brokers, Anissimov gives an insight into the advantages of being a regulated business within the crypto sphere, and how these compare to the disadvantages unregulated entities suffer. He explains how the status of being a registered cryptocurrency business reassures clients that they are dealing with an official financial institution with corporate presence and a long-term view to legitimately remain in the market.
Anissimov goes on to share his perspective on the reasons behind the fascination surrounding cryptocurrencies and whether this obsession is set to continue. The general consensus amongst crypto brokers is that, in the short-term at least, the influx of opportunistic buyers will not let up. However, the inherent market inefficiencies which make cryptocurrency investing so profitable are expected to diminish as the market matures, and with that, so will profitability.
Undoubtedly, the influence of social media, especially on inexperienced investors, has played a pivotal role in the sharp upsurge in demand for cryptocurrencies over the past few years. Although CEX.IO’s Anissimov subscribes to this view, he believes an even stronger social movement amongst the cryptocurrency trading community is developing. This movement consists of long-term investors from a range of unrelated industries who immerse themselves in the community by performing extensive research on cryptocurrencies to understand the real-world utility of the coin they are considering investing in.
Turning to the future of cryptocurrencies, Anissimov discusses whether there is truth behind the view that, in the future, cryptocurrencies will become the conventional financial instrument with which to trade, taking over from long-standing asset classes such as commodities. According to the CEX.IO executive director, cryptocurrency trading will certainly become mainstream but the speed at and extent to which this happens remains to be seen.
Recently, reports suggesting central banks are planning to launch their own digital currencies within the next few years have gathered pace. There is a feeling amongst the general public that these plans have been put in place by governments as a way of competing with cryptocurrencies, but Anissimov believes there may yet be a deeper underlying motive – intergovernmental competition.
China’s creation of a digital currency, for example, has increased the speed at which other central banks are developing plans to introduce their own digital currency, due to the threat it poses to the value and utility of their home physical currency. Governments are constantly looking to innovate and stay at the top of the financial industry, and this appears to be another one of those cases. Nevertheless, this is certainly something to look out for in the coming months.