Big Money Crypto Traders Still Bullish on BTC and ETH, LMAX CEO Says

  • LMAX Group CEO David Mercer believes the crypto could surpass gold within a decade
  • The company’s institutional clientele has shown a strong belief in bitcoin and ether during the recent chaos

The institutional cryptocurrency exchange LMAX Digital has just recorded its biggest trading day of the year, driven by bullish sentiment among the world’s leading traders.

According to the CEO of the LMAX Group David Mercerthe stock market’s whale-like clientele appears relatively unscathed, despite the chaos caused by the collapse of the UST algorithmic stable currency and its sister token, LUNA.

Mercer told Blockworks $ 3.3 billion in trades through LMAX Digital last Thursday.

“My institutions have negotiated more than ever,” Mercer said. “They are the largest commercial firms in the world, in Chicago, New York, Amsterdam and London. Their belief in bitcoins certainly remains unmarked, with their belief in ethereum seemingly the same.”

Mercer declined to specify the companies in question. But the likes of DRW’s Jump Trading and Cumberland fit the profile.

On a scale, LMAX Digital saw an average of $ 1.5 billion a day last year, with its peak day reaching $ 6.6 billion on May 19, when bitcoin collapsed from $ 59,000 to $ 34.6 billion.

In any case, Mercer said uncertainty and fear have increased the volumes of LMAX Digital. Mercer saw the institutions “fleeing towards quality”, as their platform “does not get into some of the most experimental currencies”.

Last Thursday, both bitcoin and ether, the largest cryptocurrencies by market capitalization, rose 6% during intraday trading, although some native tokens from cryptocurrencies performed better.

Mercer believes that the disappearance of Terra has a hidden silver lining.

“It could have a slightly different approach to most people,” Mercer said. “I mean, people use crypto in a very broad framework. For me, bitcoin is half the market, because as a currency it’s very stable and robust.

On the other hand, Mercer called decentralized finance (DeFi) an ecosystem of scientific experiments.

“The pegs usually break, especially if they are defective,” Mercer said, citing the sudden devaluations of many currencies throughout history, including George Soros’ successful “attack” on the pound sterling in 1992, the collapse of the Euro-Swiss franc. in 1992. 2015 and the Argentine peso in 2002.

Still, Mercer wouldn’t call algorithmic coins like Earth’s silly ideas. It was a good idea, backed by some really cool minds, he reasoned, “but it didn’t work, and it was annoying by the normal dynamics of the market.”

The case of guaranteed (and audited) stablecoins.

Instead, Mercer is a fan of stable currencies with collateral, such as Circle’s offer, USDC. LMAX Digital accepts USDC.

LMAX Digital combines USDC with USD in an order book and manages margin trading on stablecoin.

“Don’t get me wrong, probably 97% of my trade is crypto-fiat,” Mercer said. “But some customers come in and say, ‘Look, I have this USDC. It’s easier if you’re in USDC, instead of US dollars. Okay, I accept USDC and can transfer it immediately, as long as those order books are the same.

But why not USDT? Mercer cited Circle certifications through accounting giant Grant Thornton, who claims that every USDC is backed by a U.S. dollar or a U.S. Treasury. That doesn’t make the USDC a “particularly sexy stable currency,” Mercer said, but it’s guaranteed, liquid, and “one equals one.”

The USDC’s well-documented warranty allows LMAX Digital to confidently merge its fiduciary dollar order books with its USDC books.

“We don’t offer Tether today for one simple reason: that one-to-one relationship is not guaranteed,” Mercer said.

Tether constantly assures the market that every USDT is properly backed by a mix of money market deposits, corporate bonds, and the like, but Mercer does not have full faith in the reports Tether produces.

The head of LMAX said Tether needs more transparency before accepting the USDT.

“I’m a simple guy,” he said. “I’m in traditional markets. Is Tether telling me there’s $ 70 billion in circulation? Just show me my wallet. I don’t understand why that can’t happen. I just want $ 1.”

As such, Mercer said it would accept CBDCs or central bank digital currencies: digital fiat issued by central banks. Fiat is too clumsy for crypto markets and sees reducing friction in the ecosystem as the main use case for stable currencies and CBDCs, saying it “should grease the wheels”.

Bullish on the future of cryptography

Aside from the fine stable currencies, Mercer is remarkably optimistic about the future of cryptography, although the trading of digital assets accounts for a small percentage of the LMAX Group’s revenue.

Six exchanges are under the umbrella of the LMAX Group. LMAX Digital, the institutional cryptographic platform, accounted for 15% of LMAX’s total volume, but 40% of revenue last year.

Overall, the group reported revenue of $ 110 million from about $ 6 trillion in foreign currency volume, and cryptography contributed about $ 550 billion.

Surprisingly, LMAX Digital’s BTC to USD pair was the eighth largest currency pair in the entire group: the euro to the dollar was number 1, the dollar to the yen was second and the pound sterling to the dollar was the third.

By 2025, Mercer believes it will be possible to exchange bitcoins for everything: gold, S&P, euros, FTSE, nickel and aluminum, “just as you can exchange dollars for everything.”

He also predicted that cryptography will surpass gold within a decade. Crypto is currently worth about $ 1.5 trillion. Gold is between $ 10 and $ 12 trillion.

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  • David Canellis



    David Canellis is an Amsterdam-based publisher and journalist who has covered the cryptographic industry full-time since 2018. He is heavily focused on data-based reporting to identify and map trends within the ecosystem, from bitcoins to DeFi, cryptocurrencies to NFTs and beyond. . Contact David by email at [email protected]

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