Bitstamp is the oldest crypto exchange in the world and is considered one of the most reliable and secure places to buy cryptocurrencies. Since its founding in 2011, the Luxembourg and London-based company has experienced numerous bull and bear markets, coins have risen and fallen, and cryptocurrency trends have come and gone. In the interview, Bitstamp CEO Jean-Baptiste Graffier provides insightful information on the latest survey of leading crypto exchanges and reveals to investors, for example, how institutions are skillfully using the current bearish market environment to their advantage. Graffier talks about the biggest risks and challenges facing the crypto industry, but also sees "incredible opportunities" for investors and explains how the markets will develop in the next few years.
"We are still at the very beginning"
Bitstamp has launched a large-scale campaign with a goal: to make cryptocurrency more accessible. Could you tell us a bit more about it? What exactly is it about, what is behind it, and what are the benefits for investors?
The Bitstamp Summer of Discovery campaign aims to make cryptocurrency more accessible than ever, overcome the crypto winter and open up new ways to invest in digital assets. The first feature is a 0% trading fee for all coins with a total trading volume of up to $1000 (or equivalent) during the previous 30-day period, which is a unique offer in today's market.
In addition, we will soon be launching Apple Pay and Google Pay integrations to make it easier to buy cryptocurrency using methods that consumers know and like, which is key to getting started effortlessly. Moreover, leading online casinos like bitcoincasinos21.com have long been using cryptocurrency for payment. These integrations help make buying and selling digital assets safe and easy, whether someone is just getting started with cryptocurrencies, rediscovering them, or looking to expand their portfolio.
In addition, we will continue to expand our offering by introducing new coins that meet strict listing requirements. Later this summer, Bitstamp will announce two additional coins globally and two in the US. And as part of our focus on educating retail investors, Bitstamp will soon launch a new and exciting way for consumers to learn more about the aspects of cryptocurrencies that interest them most so they can participate in the markets with knowledge and be empowered to act responsibly.
The current bear market in cryptocurrencies has many investors worried. As one of the oldest exchanges, Bitstamp has already participated in numerous bull and bear markets and survived. To what extent does the current state of the markets also offer investors an opportunity?
It has been an incredibly difficult time and there have been some bad players that have negatively impacted the sector. As I said earlier, the entire sector, including us, needs to take consumer trust seriously through decisive action.
At Bitstamp, we believe that cryptocurrencies will become the mainstream currency of this decade. That's why we need to look ahead - and that's why our Summer of Discovery initiative offers users an incentive to start or continue their cryptocurrency journey in a safe, regulated and stable exchange.
"Unwavering commitment to regulate"
That's because we have an unwavering commitment to regulation in every market we operate in. In addition to continuing the licensing and registration process, we advance this strategy through regulatory investigations in key markets.
We also want to give consumers the feeling that they can act responsibly. Our latest research found that 31% of Brits surveyed are now investing and 55% cited a lack of education as a barrier to investment. That's why we've created a one-stop shop called the Learning Hub* where consumers can learn about cryptocurrencies in the areas they're interested in, providing investors with the information they need to make an initial investment.
In essence, Bitstamp is a financial services company in the broader cryptocurrency market. My team and I will continue to empower consumers to do business responsibly and work with regulators around the world to support the growth of the market and protect investors as it becomes more mainstream.
( *Editor's note: In early September, Bitstamp launched the "Learning Center" - a giant portal full of videos, articles and other sources of information on all kinds of crypto topics, prepared in an easy-to-understand manner for both beginners and advanced users.)
What threats and challenges does a bear market pose to crypto companies - and crypto exchanges in particular?
As you mentioned, Bitstamp has been through more of these cycles than almost any other company in the industry. I believe that basically those companies that focus on protecting their customers' interests and providing a service that investors know they can trust are well positioned to thrive despite changes in the market. We are certainly not slowing down at Bitstamp and we have a lot to look forward to. Whether it's implementing our Learning Center, getting new licenses in European markets, or launching industry-first initiatives like our 0% trading fee.
During the survey, you asked thousands of institutional and retail investors about the state of the crypto industry. Can you give us some insight on that?
Our survey showed that the share of retail investors who said they had invested in cryptocurrencies in major European markets increased from 45% in April to 52% in August. This suggests that the appetite for crypto investing still exists despite the recent cryptocurrency winter.
It also became clear that consumer education is still an issue that prevents investors from entering the market. One in five (21%) of those who have not currently invested in cryptocurrencies in Europe said that yes they would like to invest but don't know enough to get started. This number was highest in the UK, where the number of respondents who cited education as an obstacle rose to 31% from 25% in April.
The survey also found that confidence in the future of the sector in Europe remains high, albeit with little impact on consumer confidence. The share of retail investors who consider cryptocurrencies a sound investment fell to 52% from 54% in April. There were big differences between individual countries. In the UK, the share fell from 52% to 42%, while in Germany it rose from 56% to 63%.
Retail investors are in favor of regulation
In addition, our survey showed signs that retail investors increasingly believe the market is still under-regulated. The share of consumers in European markets has risen from 23% in April to 26% today. Spain saw the largest increase among countries, with 34% of consumers believing the industry is not sufficiently regulated, up from 28% in April.
An analysis of more than 2,000 senior-level executives at institutions such as banks and investment platforms found that they plan to increase their companies' investments in cryptocurrencies. This rose from 28% in April to 31% today, with the largest increase by country occurring in the UK, where 35% said they plan to increase investment, up from 28% in April. Institutional investors in Europe also showed signs of progress in terms of regulation, as only 23% said the industry is under-regulated, down from 31% in April.
The use of cryptocurrencies as a mainstream payment method also continues: 47% of consumers in European markets said they would feel comfortable paying for everyday items such as groceries with cryptocurrencies, up from 40% in April. The biggest increase in this area was seen in Spain, where nearly two-thirds (61%) said they would be comfortable paying for groceries with cryptocurrency, up from just 49% in April.
It was the first regulated crypto exchange in Europe. Do you think you are well positioned for the MiCA rules that will come into force in 2024?
Bitstamp Europe SA was authorized as a payment institution in Luxembourg in April 2016. At that time, Bitstamp Europe SA was one of the first cryptocurrency exchanges operating for one of the so-called traditional payment services to be licensed.
In addition, the EU regulation on the authorization of payment services in all EU member states allows payment institutions the freedom to provide services in the EU, which Bitstamp Europe SA took advantage of.
Our position in the region and experience in dealing with regulations puts us in the best position to deal with MiCA regulations as we continue to support regulation globally.
Crypto exchanges are sometimes criticized for focusing on growth and then compliance. Bitstamp seems to have a different approach - compliance first. Could you tell us a bit about the reasons behind this and how this approach is implemented in practice?
Compliance has been part of Bitstamp's DNA since the company was founded in 2011. 20% of our employees are involved in compliance, risk management, legal and audit.
Because we are regulated where we provide cryptocurrency access and services, Bitstamp is the partner of choice for most regulated institutions and consumers in the world seeking access to the cryptocurrency market.
There are now over 20,000 cryptocurrencies, many exchanges seem to be listed without significant quality control. How does Bitstamp filter out high-quality projects? What factors are relevant for listing on Bitstamp?
Investors should be able to navigate the crypto market and trade with confidence. At Bitstamp, we strive to list the most trustworthy products and services to ensure that consumers are always protected - and that they are not taken advantage of by malicious actors.
For this reason, we only list coins that meet strict requirements and undergo internal analysis that examines the origin, governance, and security of the coins.
Numerous crypto platforms have been hacked in recent months and fraudsters were able to steal millions of dollars. Bitstamp has a higher level of certification when it comes to IT security and recently received two major security certifications: SOC 2 Type 2 and ISO/IEC 27001. How does this differentiate Bitstamp from other exchanges? What are the benefits for users?
In the crypto world, security is of paramount importance. Doing everything possible to protect our customers' assets is critical to us and our goal of being the most trusted and secure cryptocurrency exchange. Obtaining industry certifications that validate our level of security is a great way to demonstrate our commitment to our customers. These are just parts of our holistic approach to security that allows our customers to be confident that their assets and data are safe with Bitstamp.
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