Marcus Swanepoel, the chief executive of cryptocurrency exchanges Luno, has revealed that speculation and investments are the two biggest drivers of customers to his platform. However, the difference between both is that most activities seem to be speculative than for transaction purposes.
Swanepoel’s statement was part of an interview which he conducted with news medium CNBC earlier today. While speaking with the news outlet, the London based former investment banker revealed that only a small portion of his users buy cryptocurrency (especially Bitcoin) and use it for transactions. However, he added that speculators and investors are rather common on the platform.
In part, he said, “Roughly about 90% I would put into the category of investments slash speculations, so it could be people who have a long term view on it, people who like to trade it and about 10% would be transactions.”
Swanepoel also touched on the trend of people testing the waters with cryptocurrencies, adding that putting only a small amount into crypto is rather pointless. He added that while the risks are rather high, it always helps to remember that the potential returns of investing in crypto are astronomical. This, in his eyes, is enough of a reason to pump high capital into the asset class.
While it is true that potential returns on crypto investments are high, there is always the other end of the spectrum, particularly the risks. Many investors seem to be risk-averse, and given the fact that not many people seem to know much about crypto assets in the first place, those who want to get in on the asset would very much prefer to do so with amounts of money that they would just as well be comfortable with losing.
This sentiment is shared by many people, including Nelson Minier, the Head of Over-the-Counter Sales at Kraken. Speaking in an interview with Nasdaq Tradetalks, Minier drew a comparison between the crypto market of today and the early days of Wall Street and traditional stocks.
He said, “Wall Street ain’t what it used to be. The first 15 years I was on Wall Street, it was fun. I was very fortunate. I started in the CDS market, which feels a lot like crypto. Here you have a lot of financial innovation, a lot of trading. It feels very much like that, […] there’s a lot of energy and enthusiasm about this progress and where it’s going.”
However, while he claimed that the excitement is present and many investors are enthusiastic, he also pushed back against the widespread notion that Bitcoin is a haven for investors around the world. Citing the issue of volatility, Minier claimed that Bitcoin is on the path to becoming a haven asset, but it isn’t quite there yet.
“I think that people are starting to portfolio manage, are starting to come in slowly. And when the market is getting shaky you saw Bitcoin rise, I mean, you wouldn’t see that before, it was trading like a risky asset,” he said.