Gaevoy: Crypto Custody Will Be an Issue for Years

The video discusses the shift from centralized exchanges to OTC trading due to events like the FTX collapse, emphasizing the importance of custodianship in crypto. It highlights the role of derivatives and stablecoins in addressing custody issues. The lack of regulatory clarity in the US is causing some exchanges to close to US investors, affecting market dynamics. Global competition is shifting, with European and Asian firms scaling up, while US firms pull back. Liquidity remains a concern, but OTC markets are robust.

What has driven the shift from centralized exchanges to OTC markets in crypto trading?

• Higher liquidity in centralized exchanges

• Better trading algorithms in OTC markets

• Concerns about asset safety and custodians

• Increased transaction fees on exchanges

Why are cash-settled derivatives advantageous in the crypto market?

• They eliminate the need for custody solutions

• They are easier to trade on centralized exchanges

• They offer higher returns than other derivatives

• They are less volatile than other crypto assets

What is a significant challenge for the crypto industry in the US due to regulatory uncertainty?

• Lack of innovation in crypto products

• Increased competition from US-based firms

• Closure of exchanges and protocols to US investors

• Higher taxes on crypto transactions

How has the regulatory uncertainty affected market competition?

• European and Asian firms are scaling up

• New US firms are entering the market

• US firms have increased their market share

• There is less competition overall

What is a challenge in estimating the amount of money moving offshore in the crypto market?

• Lack of data on offshore transactions

• High volatility in crypto prices

• Inconsistent reporting standards

• General market volume drop