At the recent CryptoCompare conference in London, Coin Rivet had the chance to catch up with Kraken business development manager Austin Alexander, who shared his thoughts on the entry of institutional money into the decentralised asset economy.
Austin started out by telling us that institutional money will come eventually because Bitcoin will continue to grow as it’s “the best money that’s ever been created”.
He said: “If they want to come now or they want to come next year or they want to wait 10 years, the sooner the better for these institutions. But there’s infinite fiat out there. There’s infinite slave money, so that’s great.”
The Bitcoin OG and co-founder of the New York Bitcoin Centre reminded us that “there’s only 21 million Bitcoin” and that this is the metric that exchanges should be planning their business models around.
He added: “The supply side is what is most important to go after because Bitcoin is amazing – the bad money will chase the good money.”
Institutions will go where the coins are
The Kraken exec – whose exchange regularly sees volume of over $200 million a day – told us: “If you have coins on your marketplace, if you have that liquidity, you have that supply.
“All these exchanges that have focused on institutional investors or being the top regulated marketplace, they’re all the least liquid exchanges out there.”
However, the four-year company veteran told us that some unnamed established exchanges may be an exception to this rule, but only because of “the near monopoly they had on retail banking – at least back then”.
He exclaimed that if an exchange is now exclusively targeting an institutional investor base, it is a “losing strategy from the start”.
Building on Bitcoin
Building on and with Bitcoin seems to be the way to go according to Alexander.
It was recently revealed that Kraken was sending Bitcoin salary payments to over 250 employees across the world. On this topic, Austin said: “We have a lot of people who are somewhat remote digital nomads. If you’re travelling or living in places outside of the kind of banked West, it’s better to have Bitcoin as it works better than the US dollar.”
We respect the quest for sound money but @PeterSchiff is wrong when he says "there is no way that people are going to work for salaries paid in bitcoin". Kraken paid 250 salaries in bitcoin in April and more employees are opting for crypto every month. https://t.co/OZuh4gcbfw
— Kraken Exchange (@krakenfx) May 23, 2019
Austin passionately concluded that “Bitcoin is what’s important if you build on it”.
“The focus should be on the supply side, on catering to the coins – the institutions don’t have coins. They have fiat, which is garbage money. It is slave money. It is infinite money.
“If you build for that audience, they’re coming, whether they realise it or not. Whether they like it or not, they will follow the coins, not the other way around.”
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.