July 4, 2024
In conversation with our correspondent Anjali Kochhar, Vikram Subburaj, CEO, of Giottus Crypto Platform talks about ETFs, cryptocurrencies, global scenario of crypto, and much more.
1. Describe the current state of the crypto market, including major trends and recent shifts in volatility and sentiment.
Answer: The crypto markets are in an exciting phase now. After a prolonged bearish phase, the market is seeing bullish action in the past six months. Now is the time when all the major assets rise in value and enter a possible price discovery mode with minor corrections and subsequent rebounds all along. These are indications of a maturing market. Also, the picture looks rosy on the regulatory front and there is a more structured way of transaction monitoring in India now. On a global perspective, the green light for Bitcoin (BTC) and Ethereum (ETH) spot ETFs in quick succession has seen major fund inflows and appears to be a pivotal moment for general adoption of the asset class. On the whole, this is a great time for crypto investors and the sector in general.
2. Which cryptocurrencies hold the most promise in 2024, and why? Are there any exciting emerging projects or technologies on the horizon?
Answer: The crypto world is seeing the emergence of new narratives and assets. Those ready to explore beyond the mainstream have immense opportunities and some of the promising narratives are AI and gaming; DePIN or Decentralised Physical Infrastructure Networks; Real World Assets (RWAs) etc. AI and gaming tokens are taking the world by storm (example RNDR and FET). Arweave (AR) is making significant strides in the DePIN or decentralised data storage arena. RWAs, which are essentially a link between real-world assets and the crypto world, are also a promising arena. The promising tokens here are ONDO, PENDLE and RIO. Effectively, these are all the crypto world’s response to developments in technology. Investing in these emerging narratives requires a blend of enthusiasm for new technologies and a cautious approach to risk management.
3. How will cryptocurrency ETFs impact the market and investor behaviour? What challenges exist for their adoption, and how can we address them?
Answer: The approval of Bitcoin and Ethereum spot ETFs by the US SEC in quick succession has generated significant enthusiasm in the crypto world. These ETFs allow investors to gain exposure to BTC and ETH without actually holding the assets. Bitcoin’s ETFs have already seen substantial institutional fund flows. This influx is expected to have a cascading positive impact on the broader crypto market. Also, the ETFs mark a pivotal step towards mainstream acceptance and it will potentially attract more traditional investors. This points to the fact that crypto is here to stay in the long-term and it is maturing as an asset class. However, there are still challenges for more widespread adoption. Regulatory hurdles, market volatility, and the need for robust infrastructure are the key concerns.
4. What are your thoughts on the role of memecoins? Can they maintain popularity, or will there be a shift towards fundamentals?
Answer: Memecoins have experienced a remarkable surge in the current bull run, with many analysts attributing this phase’s excitement to these playful assets. Typically, memecoin rallies occur towards the end of bull cycles, but this time we’ve seen a significant upswing early on. This suggests that there may be more positive movement in the ongoing bull run. However, it is crucial to approach memecoins with caution. While they can offer quick gains, they are inherently volatile and speculative. Prudent investors should allocate only a small portion of their portfolio to memecoins and be ready to take profits at sensible price points. As the market evolves, there may be a shift towards assets with strong fundamentals, but for now, memecoins continue to captivate attention and drive market activity.
5. How will recent US crypto legislation impact the global market, cryptocurrency exchanges, and blockchain innovation?
Answer: The recent US crypto legislations, piloted mostly by Senators Cynthia Lummis and Kirsten Gillibrand, mark a significant shift in the regulatory landscape. The new laws aim to provide greater clarity and oversight, which can foster investor confidence and drive institutional adoption of crypto assets. For crypto exchanges, the legislation introduces stringent compliance requirements, including enhanced KYC and AML protocols. This can increase operational costs but ultimately contribute to a more secure and transparent trading environment. Exchanges worldwide will need to align with these standards to continue serving US customers, potentially leading to a more uniform global regulatory framework. Blockchain innovation could see both challenges and opportunities. While regulatory scrutiny may slow down certain speculative projects, it can also pave the way for more sustainable and innovative applications.
6. What challenges and opportunities do crypto exchanges face in the coming year, and how will they evolve?
Answer: The single most crucial challenge lies in the regulatory space for Indian exchanges. There is a shift from absence of regulation to more defined processes and reporting standards. Giottus and many other exchanges are now registered with the Financial Intelligence Unit of the Government of India. We are also reporting entities under the India Cyber Crime Coordination Centre (I4C). The challenge lies in standardising the compliance protocols and making the highly distributed law-enforcement agencies aware of the processes in place. This is a long game and there is increased synergy between exchanges and central nodal agencies in achieving this end. In terms of opportunity, exchanges are innovating at greater speeds to cater to the evolving market. There is rapid crypto adoption and there is a huge space where everyone can reap the benefits of this new financial order.
7. What’s your outlook on staking and Systematic Investment Plans (SIPs) in 2024? How will they influence crypto investment strategies?
Answer: SIPs in crypto are a bulwark against quick price corrections. At Giottus, we advise all investors to put some money in good SIPs, like the ones we offer, so that any losses can be evened out over a period of time. Staking, similarly, is a passive way to grow one’s crypto portfolio along with fixed reward schemes that exchanges offer. SIPs, staking and fixed rewards will grow in popularity as crypto matures and investors hold crypto assets for the long term without INR conversion.
8. Looking beyond 2024, what long-term trends and obstacles will shape the future of cryptocurrencies?
Answer: Looking beyond 2024, several long-term trends and obstacles will shape the future of crypto. Institutional adoption is expected to rise, driven by regulatory clarity and products like ETFs, enhancing market stability. The growth of decentralised finance (DeFi) will continue, offering innovative financial services and bypassing traditional banking systems. Integration with traditional finance will likely increase, with central banks exploring digital currencies (CBDCs) and financial institutions offering crypto-related services.
However, challenges remain. Regulatory uncertainty and differing regulations across jurisdictions can create complexities and stifle innovation. Security concerns, such as hacking and fraud, will require robust measures to protect user assets. Market volatility and scalability issues also pose significant obstacles, limiting widespread adoption and efficient transaction handling.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
