Bit.com’s Toya Zhang on Exchange Strategies in The Crypto Winter, Mainstream Adoption of Blockchain Technology, And Hiring in a Bear Market.

In this interview, Toya Zhang, Chief Marketing Officer at Bit.com, answered our questions about the crypto winter and the future of the crypto industry.

Hello Toya! Thank you for participating in this interview. Could you introduce yourself to our readers?  

Hi, I am more than happy to give you this interview. I began my career at Elliott, Barings, Latham & Watkins, HKVCA, and Huawei before moving into the crypto and blockchain space in 2016 with OKX and later joining AAX as Deputy COO. Since I started within the cryptocurrency industry, I helped prominent cryptocurrency startups in raising tens of millions of dollars. Now I found my place as Chief Marketing Officer at Bit.com, a full suite cryptocurrency exchange established as part of the Matrixport ecosystem.

How are exchanges being affected by the ongoing rout in the crypto market?

Exchanges most commonly have trading fees as the main revenue stream. Trading fees are highly relevant to the crypto price so when the price drops, the trading fees drop too. One other thing to note is that, when the market is down, people have bearish sentiment to trade and trading volume would decrease as well, which results in trading fees decreasing.  

In recent times, we’ve been hearing news about leading crypto exchanges laying off people. What is Bit.com’s approach to this in these tough times? 

The aggressive hiring for most exchanges during the bull market was mostly meant to acquire more markets and users. With the projected shrinking in revenue, exchanges will have to lay off people to preserve a longer runway for the business. In addition, acquiring users is much harder during a bear market. Compared to the bull market, when FOMO (fear of missing out) sentiment among the crypto inquisitives dominated, the bear market ironically reaffirms the crypto cynical’s value.

That’s also the joke, that we saw, when Bitcoin was so popular and people rush to buy in when the price is 60K USD, and so unfavored when the price is 20K.

Bit.com is in its growing stage. It was a super lean team for the past 1.5 years that brought the core features like crypto options trading, unified margin, and portfolio margin online. In 2022, even though it is crypto wintertime, Bit.com is in the phase of fleshing it out. The advantage is that the market has ample trained talent available. However, we are still going to take a prudent route, and grow at a steady pace.  

What advice do you have for small-time retail investors in the crypto market at this time?

Crypto investment, especially altcoin investment, is the opportunity for small-time retail investors to participate in the traditional venture capital market. First of all, there are huge risks involved, and a huge amount of due diligence is required. The venture investors are betting on a digital future that the project they are investing in is going to have a role to play.

On the one hand, retail investors need to have extensive knowledge regarding the projects, as well as judgment about the future landscape. On the other hand, participate in the ecosystem rather than just betting on the token’s secondary market. Participating in the ecosystem will also provide a good sense for the investors if the project is making sense.

Finally, learn how to manage the risk with derivatives trading. The capital market is not a delta 0 world, it is not a gambler’s casino. It is highly correlated to the economic cycle, geopolitical environment, and other macro factors, so always keep risk management on the top of your mind and learn to use financial instruments to protect the risk exposure.  

DeFi has become one of the most affected sectors in the crypto industry lately. How do you think what’s happening now will shape the future of this sector?

DeFi was super hyped with the yield farming last year. However, the yield comes with a price and is not sustainable. The short life of the high-yield products is proving the crypto going mainstream to some extent. It will go closer and closer to the traditional finance industry. On the brighter side, DeFi has been and will always be, the frontier of technology and finance product innovation.  

How do you perceive the crypto winter to impact mainstream adoption of blockchain technology and cryptocurrencies?

The crypto winter in 2018 was the period of time for protocol ecosystem development; therefore, the explosion of DEX, Memecoin, DeFi, GameFi, NFT etc. This crypto winter will offer the time window for non-financial relevant product building, namely but not limited to Web3, SocialFi and more.

What is Bit.com doing to support serious crypto investors through the bear market? Could you shed some light on your upcoming launch of USD options and the reasons behind this move?

The market is craving for real yield instead of the ones multiplied by poor risk management and leverages. One of the real yield products would be structured products which are applying options trading in different strategies. It has been a popular product within traditional finance. However, it is undervalued by crypto because of the overhype of 20x – 50x return for new tokens during the frenzied times.

In the market, Crypto options are traded with coin-margin due to historical reasons. Users need to hold BTC to trade BTC options and hold ETH to trade ETH options, PnLs are also calculated in a coin-dominated way. This margin feature prohibited the market to scale and grow. With more and more altcoins going mainstream, there is a huge demand for altcoin options to forge different structured product strategies. Bit.com will be offering firstly USD margined options, which is very straightforward, and easy to trade, and secondly altcoin options, for enriching the trading instruments.

With the addition of USD options and altcoin options, Bit.com will empower a more risk-conscious investment environment, and provide yield with real value.

Thank you for your time and your insights Toya!

Thank you! It was a pleasure talking to you.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.