Derivatives will be crypto’s “next big thing” says 100x CEO (ft. Alexander Hötpner)

Word on the Block | Forkast.News

As Huobi winds down in China, Binance gets put in the regulatory doghouse in the U.K., and Bybit is slapped with enforcement action by, Canadian authorities — cryptocurrency exchanges around the world are feeling the heat of intensifying government scrutiny and crackdowns.

Alexander Höptner, who became CEO of 100x Group — the holding group for crypto derivatives exchange BitMEX’s owner HDR Global Trading Limited — after BitMEX co-founders Arthur Hayes, Benjamin Delo and Samuel Reed were charged with violating the U.S. Bank Secrecy Act, says that the reason behind the regulatory action is because crypto derivatives are “the next big thing.”

“Most of the regulators are currently working on regulatory regimes on spot trading, brokerage and custody,” Höptner told Forkast.News in a video interview. “The next thing that's coming now is defining and designing a regulatory regime for derivatives.”

Höptner hails from a traditional finance (TradFi) background, having led Germany’s second largest stock exchange Börse Stuttgart to launch one of the European Union’s first regulated digital assets exchange. He also held executive committee roles with the operator of the Frankfurt Stock Exchange, Deutsche Börse AG.

Unlike Höptner, who has embraced the increasingly digitizing finance industry, other prominent players in the traditional finance space are more skeptical of crypto. “Big Short” investor Michael Burry recently raised hackles by calling the crypto market an overleveraged “bubble.”

But to Höptner, such concerns are overblown.

“When you look at [our] leveraged products, yes, we have 100x, but the majority of the leverage clients are using single-digit,” Höptner said. “When you look at the classical financial markets, yes, the leverage is lower, but the usage of that one is much higher.”

In a recent JPMorgan survey, 49% of investors from across 1,500 institutions shared legendary investor Warren Buffet’s sentiment on Bitcoin, calling it “rat poison” or a temporary fad. The other 51%? They believe that Bitcoin will “become an important asset” and is “here to stay.”

For Bitcoin and crypto to reach new heights and continue to achieve further institutional and professional adoption, some exchanges such as FTX have adopted licensing strategies. But according to Höptner, exchanges will need to pick and choose primary locations to comply with local regulations before global expansion.

“You cannot be in every country in the world, fully regulated. It’s impossible,” Höptner said. “First thing’s first — start with the first fully licensed jurisdictions and then we tackle the next one, and probably the first one is not the U.S.”

Watch Höptner’s full interview with Forkast.News Editor-in-Chief Angie Lau to learn more about which countries are wooing derivatives exchanges, why crypto is not so different from the traditional finance world, and how to assess the current digital assets market from a long-term perspective.