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OKEx Beacon Program — First Coaching With Jay and Lennix: A Recap

2020.06.25 Kelvin

As we move into the second week of the OKEx Beacon Program, our six recruited mentees have already met their mentors, OKEx CEO Jay Hao and Director of Financial Markets Lennix Lai. Apart from daily engagement with the OKEx team, the two executives have also taken part in a 30-minute mentoring session on Telegram.

Below is a recap of the interesting and insightful topics discussed during the session.

Phillip Taffley: Can you provide some details on why there is a high correlation between the price of Bitcoin and other crypto assets and do you believe that correlation will diverge in the future?

Lennix: The world of traditional finance and the crypto world are getting closer and closer. After several years of development we are using similar financial and economic theory to trade crypto assets right now, and also most crypto exchanges are adopting similar KYC and AML standards as a traditional financial institution. There are two factors, I believe: 1) BTC is the de-facto trading and settlement currency of all altcoins 2) BTC has consistent dominance in the crypto market.

Phillip Taffley: When watching YouTube videos on people’s analysis of the price of Bitcoin, they tend to use trend lines and rolling averages to discuss where the price will go. They talk about ceiling prices etc.

How reliable is that information? Are they good analysis tools? Or are there more sophisticated analysis tools to assess what might happen to the price?

Lennix: As with all technical indicators that are widely used by TA traders in FX, stock, commodities and crypto, I think TA is mostly a representation of market sentiment. It does provide a certain level of prediction power as well as noise too. A good TA-based trading strategy should contain robust back-testing with historical data for consideration over a long period of time.

Nikita Ermakov: According to the recent research made by Fidelity, 36% of respondents – 279 institutions in the U.S. and Europe – were currently already invested in digital assets.

“These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class,” commented Tom Jessop, president of Fidelity Digital Assets.

Speaking of this, how do these institutional investors actually invest? Besides Fidelity and other custodial services, can you give some other examples? What kind of services can companies, working in crypto (including crypto exchanges) provide for such investors? Which services does OKEx provide for financial institutions?

Lennix: Institutional is a big domain — it’s a combination of high-frequency trading, quants/proprietary shops, to hedge funds, to pensions and family offices. We see prop. shop/HFT are likely to open an account and route directly to an exchange. Pension/family funds are still engaging with crypto with caution due to compliance and regulatory consideration. Market infrastructure is getting better — comparably. We now have CME as a regulated exchange to offer derivatives (futures and options) on Bitcoin. And we have bank-backed custodians.

Phillip Taffley: What are your thoughts on Goldman Sachs proclaiming that Bitcoin is not an asset class?

Lennix: I believe the interest in crypto for institutional clients is high. And the uncertainty in today’s economy is another promotional boost to crypto. Yet some of them have well-written investment mandates that crypto/bitcoin is NOT within their scope of investment. It would take more time. If you look closely, GS claimed Bitcoin generates cash flow, earnings, diversification benefits or failed to hedge inflation.

Guillaume Girard: What do you make of the explosive growth of stablecoins lately, mainly Tether? And do you think this is a direct consequence of the March 12th crash?

Lennix: The March 12th crash was a world-wide risk-off in response to a drastic crash in equity markets. Bitcoin is still considered a high-risk alternative asset and so BTC traders were the victim of the massive offloading process. The correlation of Bitcoin vs. equity market was considerably much higher afterwards.

I still think Bitcoin is fundamentally very different from stocks/bonds/commodities. Bitcoin can provide some safe-haven or hedging effects against global macro; but obviously not all.

Nikita Ermakov: Do you believe that new products focused on retail investors investing in stocks/indexes (with easier access rather than using bank or broker) — for example, Revolut or Robinhood — will slow down people’s interest in investing in crypto?

Lennix: Institutional participation is having a nice growth across the platform. We see 7x growth in terms of volume and number of clients over 1.5 years. I think Robinhood /Revolut is doing a good job in promoting crypto. What we need right now is adoption and adoption stems from education.

Antoine Wallet: So let’s say I trade spot and margins. As a trader what are the advantages of products such as futures and options?

Jay: Products like futures and options are both financial instruments that help with your trading strategy, they provides higher leverages and requires less funds as the margin. OKEx’s futures are one of the very first products launched on our platform, and have become the largest market across all crypto derivatives markets nowadays. We currently offer weekly, bi-weekly, quarterly and bi-quarterly futures contracts of 9 major digital assets, in a bid to fulfill various trading demands like hedging, arbitrage and so forth.

By the way, for options: it’s an important tool, as they give traders more versatility and a great way to hedge their risk. Like futures, with options contracts, traders can buy or sell an agreed amount of the underlying asset on a fixed date in the future at an agreed-upon price. However, unlike futures, options give the buyer or seller the right, rather than the obligation, to buy or sell on the date.

Dmytro Sokoliuk: What do you think about crypto in your life, how has it affected you? What do you need to become successful in crypto? What does success mean for you? It is not hard to talk about benefits, but what about temptations and trials? How to keep calm?

Jay: I think crypto has no boundary, it’s nationless. I’m a true believer of crypto and passionate about it. I believe one needs to be optimistic, have perseverance, creativity to become successful in crypto. As for success, everyone has different views on it. To me personally, to love what you are doing and be optimistic about the future is a success already. I’m glad now that I work for OKEx. Meditation keeps me calm and helps me think more creatively. And also a pescatarian diet keeps me healthy.

Antoine Wallet: I’m really into sharing the love for crypto and organize meetups where I live in Ho Chi Minh City and often get this question: In your opinion, what is going to be the most challenging thing for global crypto adoption?

Jay: The nature of blockchain is trustless. As it will be an accessible choice of more unbanked people, it will change our way of investments, payments, and peer to peer financial activities.

Dmytro Sokoliuk: For now, I am doing different activities in crypto: translation, writing articles, video creation. Please advise: in which way should I move to find a niche where I can work from home in the coming years? Maybe it’s the tech side or any other? What is your advice? Thank you.

Jay: That’s good to know that you’re working on #crypto too. Education is a good direction, there’re still a  large proportion of people who haven’t heard of or aren’t familiar with the jargon.

Virginia Mijes Martin: In an industry that is still incipient, creativity and new business models in the economy are still to be discovered in two years, we are living a deep transformation, creative leadership is fundamental, will we see in the next 5 years a milestone in the history of decentralized finance and operability in Blockchain and some deep change the society?

Jay: I love you’ve brought up a great topic — digital transformation and change of how people interact with each other amid pandemic. We begin to put everything on digital, and hence build the stuff in a more trustless way. It matches with the attributes of blockchain!

In the blockchain and crypto world, the level of being trustless is highly emphasized. Though I said I don’t have a crystal ball, the world is telling me the decentralization of finance will become more and more popular among people from different nations to fight for financial inclusion.

The emergence of any kind of new technology, if it is not immediately accepted by the market, will soon meet with the fate of suspicion and denial. Acceptance and mass adoption take time, and that’s why every one of us who works in the blockchain industry should take the responsibility to educate the public and try our best to push adoption forward. And regulation is another key challenge, we’ll try our best to meet local regulations.

Getting to know the mentees

Guillaume Girard

Guillaume started to take interest in crypto in 2017 and is looking to bridge the gap between traditional financial and digital assets in his future career. Currently, he is a business school student studying finance in France. He is also the Head of Digital Assets for KryptoSphere, the first student association in France specialized in blockchain and cryptocurrencies, with more than 100 members across 6 business and engineering schools across the country.

Virginia Mijes Martin

Consolidated business professional in the technology sector with more than 25 years managing international business for multinational corporations and SME. Virginia has wide knowledge and experience as a director in the areas of marketing, sales, finance and operations, managing teams, strategic and tactic plans, market development as well as brand positioning segments.

Since 2018, she has been involved in the blockchain ecosystem and cryptocurrencies at local and international levels. During this period, she has trained more than 500 people in different institutions, universities, companies and schools. She has given conferences to more than 800 people and is a writer and editor for international magazines of the blockchain industry that belongs to different groups of women in technology globally.

She is a graduate of the Executive MBA from Eada Business School, Trainer, Entrepreneur, Senior Management Consultant and VP Associació Blockchain Catalunya.

Dmytro Sokoliuk

Dmytro is a businessman from Ukraine. He is also a content creator specialized in translation, writing, video and meme creation. He started his crypto journey in 2017 and has been passionate to learn about crypto ever since. Last month, Dmytro won the third place of the #TradewithOKEx competition.

Phillip Taffley

Phillip has worked in a variety of industries across both the public and private sectors. Since the COVID-19 epidemic has enforced a change in the ways in which business is conducted, he has gained a growing interest in the crypto industry. After conducting in-depth research, he sees the future potential of exponential growth that blockchain has to offer across many different industries and he believes that it will revolutionize the world. Phillip wishes to establish a foothold within the industry which will empower him to work at the forefront of this revolution. 

Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

This recap has been edited for clarity.

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