The crypto market now has a market capitalization of over $1.5 trillion.
Amid all this, the cumulative market capitalization of Bitcoin and Ethereum exceeds $1 trillion. With Bitcoin trading at over $51k on Feb 17, the digital asset has a market cap of over $956 billion.
However, the wider trading community expects the coin's price to surge to six-digits. Leading analysts from global banks like Citibank say the Bitcoin price can reach over $100k by the end of 2021.
Behind this surge are institutional and retail traders who purchase Bitcoin for speculative reasons or to hedge inflation. Amid this, some sellers liquidate the coin at higher prices either to bank profits or to divest to other high-potent digital assets.
It is their participation that prices Bitcoin. During price discovery of which, market forces of supply and demand play a role, the Bitcoin price can rise and fall depending on which side of the equation has the upper hand. The prices of most crypto assets have been rising, pointing to buyers stripping the dumping efforts of sellers.
In this tussle, cryptocurrency portals that facilitate the exchange of coins for fiat or vice versa determine the price's trajectory. Exchanges act as interfaces for users to participate in the multi-trillion and liquid crypto market by easing coin acquisition via popular fiat payment channels or using other cryptocurrencies.
As crypto heats up, Alfacash Store presents itself as a multi-asset portal for traders. They can compliantly trade digital assets using popular fiat payment methods such as SEPA/QIWI/Russian Banks or through other digital assets in a fully non-custodial and automated manner.
The platform requires ID verification after registration, but the process is very quick, and users will be able to start trading fairly soon. This is possible thanks to its KYC widget, created in partnership with AML compliance and anti-fraud leading provider, Sum & Substance (Sumsub).
In today's interview, the Director of Alfacash Store, Nikita Soshnikov, takes us through the state of the crypto market, the rising demand, their drive, and their take on market regulation.
Edward Moom: Bitcoin! $50k and rising, do you think exchanges are ready for $100k?
Nikita Soshnikov: I think the good crypto-exchanges are always ready for price changes. In this case, maybe are the developers and the community who should be preparing more for that mark. Beyond the greed or FOMO that this can cause at its time, the truth is the mining fees aren’t very small for Bitcoin these days: they’re over 26 USD per transaction and we can’t have that.
We need to start using the scalability solutions that are already there, like Lightning Network. Bitcoin will keep growing, and we need to grow with it.
Edward Moom: From $20k to $50k, what is behind this rally Nikita Soshnikov? What are investors not seeing?
Nikita Soshnikov: Well, I think is clear what is behind: a lot of institutional investors, buying in and outside the public eye. Hedge funds, companies, high-profile individuals. Everyone wants some Bitcoin these days, and that’s good for the price. At least in the short term. We really don’t know where the companies will put their limits, so, we should be careful.
Edward Moom: Tesla got in with a $1.5 billion purchase. Did JP Morgan analysts foresee this? Remember, they estimated $600 billion of institutional demand in the next few years.
Nikita Soshnikov: JP Morgan has a funny history with Bitcoin and cryptocurrencies, as you may know. At first, they were very skeptical of it, but they couldn’t but jump in when the investment seemed more than interesting. Their analysts might do a good job now, even if not everything can be foreseen. They’ll make mistakes, but maybe they’re not very wrong about this $600 billion mark. It’s probable that they’re likely to fall short, though.
Edward Moom: Do you see Joe Biden and his $1.9 trillion stimulus package passing as a possible trigger for the next higher high?
Nikita Soshnikov: Until now, the correlation between the dollar and Bitcoin has been inversely proportional. If the dollar suffers from higher inflation with this stimulus package, Bitcoin will probably make some profits, indeed.
Edward Moom: What of Ethereum? Any reprieve for the unreasonably high Gas Fees?
Nikita Soshnikov: On Ethereum is happening something similar to Bitcoin: the general use is growing quickly, in this case, thanks to DeFi apps and the future staking. I think these are just temporary growing pains. In the meantime, we should try to use the scalability solutions at hand. Raiden Network, for example, could bring fast and cheaper transactions, even in its Beta state. And the next EIP-1559 can fix most of it for now.
Edward Moom: Do you think miners will revolt against EIP-1559? It looks so near yet so far for ordinary users who want more but can't accept the $20 Gas fee.
Nikita Soshnikov: It seems very unlikely. Absolutely all the miners would need to not switch over, and the thing is the proposal is very popular among developers and users. Plus, is beneficial for the network in the long term. Yes, the miners will earn a bit less with it, but a revolt would mean an Ethereum Classic-like fork, and the most popular chain will win in price and community. I doubt someone would want that again.
Edward Moom: The unexpected demand is overheating and halting some exchange systems. Do you think it will be the norm in this bull market?
Nikita Soshnikov: It can happen, but I wouldn’t call it “the norm”. The exchanges are preparing already for this, and the traders will ease the pace eventually.
Edward Moom: There are many positive vibes about non-custodial trading, precisely the aspect of control by the user and rising liquidity. What's your take?
Nikita Soshnikov: Of course, non-custodial trading is probably the best way to trade. The users have full control over their funds, and besides the independence and decentralization of it, they’re also avoiding risks like high-profile exchange hacks. It’s secure, it’s fast, it’s easy, and promotes the main purpose of cryptocurrencies: decentralization of money.
Edward Moom: How do you think crypto ramps can balance between staying non-custodial and complying with applicable rules like E.U.’sGDPR without affecting user experience?
Nikita Soshnikov: There are ways, clearly. The first thing is assessing these regulations and be willing to respect them, provided they are reasonable. In Alfacash, as a non-custodial but regulated exchange, we partnered with Sumsub to make the checks and comply with rules like E.U.’s GDPR. In the process, the user experience (and their time) is barely affected.
Edward Moom: Visa is already on board, PayPal and Mastercard too. Is this good for non-custodial exchanges who are helping new traders get into the ecosystem?
Nikita Soshnikov: I think the keyword here is “limits”. Visa, Mastercard, PayPal, and so on: they can deal with cryptocurrencies, but they have strict and sometimes arbitrary limits and requirements. Not to mention they’re not decentralized at all. PayPal, for example, doesn’t even let you withdraw your cryptos. So, non-custodial exchanges undoubtedly offer something that they’re not. However, partnering with these popular services might be beneficial for all the parties, including the new traders.
Edward Moom: DeFi multi-million exploits, exchanges losing billions through hacks, contract killers taking crypto, yet Bitcoin and crypto keep rising? From your lens, how best can exchanges protect not only their funds but the data of users?
Nikita Soshnikov: Security measures should be a top priority for any exchange. In the case of the non-custodial exchanges, they have the advantage of letting the users control and protect their funds better, since they’re not an obvious target for hackers. The data is also important, though. Data breaches can happen, and the users can receive malicious emails asking for their keys on behalf of the service, for example.
That’s where the learning is important: the exchanges should keep informed their users all the time, and also teach them about the risks and benefits involving the crypto-trading. Besides, the exchanges should also keep a strict and frequent evaluation of their digital defenses.
Edward Moom: In your view, are data synthetizing third-party firms like Chainalysis good or bad for crypto?
Nikita Soshnikov: Since some cryptos (like Bitcoin) aren’t really meant to be private, the work of firms like Chainalysis can be beneficial for aiding the authorities on their quest for crimes with cryptos. Besides, they can give us a nice take on the use and adoption of cryptocurrency worldwide, and what we need to improve or what can we take advantage of as part of the community.