Bittrex CEO says blockchain is the future – The Royal Gazette

Updated: Oct 13, 2021 08:10 PM

Financial institutions need to get serious about cryptocurrencies, a technology expert said today.

Stephen Stonberg is the CEO of Bittrex Global, one of the world’s largest blockchain digital-asset trading platforms.

He was a keynote speaker at the Bermuda Virtual Tech Summit 2021 presented by the Bermuda Business Development Agency.

Mr Stonberg said: “We are sort of at a very interesting inflection point for crypto. We are seeing retail and institutional adoption that is only set to grow for both crypto and blockchain technology.”

He said that blockchain is the broader category, and cryptocurrency is a use of blockchain technology.

Mr Stonberg said: “Twenty-one per cent of banks are using blockchain for settlement, for transfer of funds. They are not using it really that in-depth. That just means they are touching it, or they are trying out Bitcoin. So, it is being tested or leveraged as a back-end process for many banks.

“They haven’t wanted to do it — remember, they are happy with their awful old systems where they can charge huge fees — but now they have no choice. It’s either do this or get left behind like Barnes and Noble did in the bookselling game with Amazon.”

Among institutions, Mr Stonberg said, hedge funds tend to be the most nimble, more so than banks or asset managers.

He said a recent survey showed that 17 per cent of hedge fund CFOs said that they expect to invest more than 10 per cent of their investment holdings in cryptocurrencies in five years.

Mr Stonberg said: “That’s a lot of money chasing crypto. It’s going to have a huge impact.”

He said that Bitcoin is the best-performing asset class in the last decade, adding: “It’s pretty hard if you’re one of these traditional asset managers like Goldman or Fidelity telling everyone with their balanced portfolio to be happy with your 5 or 6 per cent.”

Mr Stonberg said that Morgan Stanley is allowing its clients to invest in two cryptocurrency funds for exposure, while other large asset managers are moving in that direction due to client demand.

He said that traditional retail banks “can see the writing on the wall” as customers are already taking money out and sending it to crypto exchanges in mass volume or even to platforms like Robinhood, which are offering cryptocurrency trading.

Mr Stonberg said: “Crypto purchases through bank accounts may be on the horizon.”

He added: “Traditional banks as we know are very slow to move, and as usual no notable announcements. They haven’t even announced they are doing things.

“They are just going to kind of keep their head in the sand.

“But 60 per cent of crypto owners want to use their bank to invest in crypto.”

The future, Mr Stonberg said, will be “digital over dimensional”.

He added: “Like the internet did with retail, blockchain is going to democratise the traditional financial markets. It is the Amazon moment for traditional financial markets.”

Bittrex Global has an operation on the island.

Bittrex Global (Bermuda) Ltd was issued a full Class F Digital Asset Business Act licence by the Bermuda Monetary Authority.

The company is licensed to operate a cryptocurrency exchange under the supervision of the BMA.

Stephen Stonberg, of Bittrex (File photograph)

Stephen Stonberg, left, of Bittrex Global, with David Burt, the Premier (File photograph)