Alexander Höptner, CEO of BitMEX, responded to Bitcoin critics in a recent blog post. He praised El Salvador’s policy decision, while also commenting on crypto-adoption in emerging markets. He said,
“What the critics fail to recognize is that developing countries like El Salvador are leading the world in embracing decentralized digital currencies and payments.”
“[El Salvador] they are choosing to try something new. This deserves praise, not derision.”
Days after El Salvador became the first country to adopt Bitcoin as legal tender, credit rating agencies and global regulators, including the IMF, had raised several concerns.
Bitcoin as legal tender… again?
As far as adoption is concerned, however, Chainalysis’s 2021 research confirmed that developing countries are leading the adoption index. The study stated reasons like inflation, ease of exchanging remittances, and carrying business transactions in emerging markets as being responsible for greater adoption.
Along similar lines, BitMEX’s CEO also made predictions for emerging markets. He asserted,
“My prediction is that by the end of next year, we’ll have at least five countries that accept Bitcoin as legal tender.”
According to the exec, all of the five countries will be developing countries. Additionally, he listed out reasons why developing countries will be the ones to jump into crypto next.
“The importance of this [remittances] cannot be overstated for many developing countries whose main export is human capital.”
Quoting World Bank figures, Höptner argued that$540 billion in remittances reached low and middle-income countries last year. Therefore, it is no surprise that Bitcoin’s “near-negligible fees and quick 24/7/365 transactions” are spiking interest.
Consider the example of Tonga, for example. In a recent interview, Tonga’s Member of Parliament Lord Fusitu’a had underlined the importance of low-cost remittances. He said,
“For remittance dependent countries and countries that suffer from hyperinflation, it’s not just the most sensible choice – it’s almost our only choice for survival…”
In the context of inflation, Höptner believes that “Covid-19-related stimulus” has raised those concerns. On the back of the pandemic, the IMF had also claimed that due to several factors, emerging markets and low-income countries are more vulnerable to inflation.
Politics of Bitcoin
Having said that, the road to Bitcoin adoption is still not simple. According to the exec,
“Politics will play a big role in the adoption of Bitcoin as legal tender…”
This means failure by politicians in implementation will “hurt wider adoption of cryptocurrencies in general.” Just like the dream of “economic liberation” with Bitcoin adoption still remains debatable in El Salvador.
Meanwhile, large transaction volumes on peer-to-peer (P2P) platforms also continue to drive the adoption index in many emerging markets, as per Chainalysis.
BitMEX CEO Predicts Five Developing Countries Will Accept Bitcoin As Legal Tender Next Year – Here’s Why
BitMEX chief executive officer Alexander Höptner is predicting that five developing nations will follow in El Salvador’s footsteps and adopt Bitcoin (BTC) as legal tender by next year.
In a blog post, the head of the crypto exchange says BTC will help citizens of developing countries financially by reducing the transaction fees associated with sending money across the globe.
“Remittances made up an astounding 23% of El Salvador’s GDP (gross domestic product) in 2020. Across the world, it’s nearly 10% of GDP in the Philippines, which has over 10 million overseas Filipino workers. According to World Bank data, low and middle-income countries receive about 75% of total global remittances.
This money has got to find a way home somehow. But the current system of remittances is…charging [people] an average of 10% just to send money home the next business day… People deserve better. So is it any surprise that Bitcoin – with its near-negligible fees and quick 24/7/365 transactions – would pique the interest of countries reliant on remittances?”
Höptner says another reason developing nations may adopt BTC is growing concerns of runaway inflation, something Bitcoin is not burdened by as it has a maximum supply cap of 21 million.
“The IMF (International Monetary Fund) forecasts 2021 inflation for developed countries at 2.4%. Its estimate for developing countries is more than double, at 5.4%. While consumers in advanced economies might be better placed to weather shocks, people in developing countries are more vulnerable, especially when the price of consumer goods and services is impacted…
Bitcoin fixes this, with its capped supply of 21 million. And developed countries – and/or their people – are noticing. “
Lastly, Höptner says the decision to adopt BTC as legal tender ultimately rests with political leaders and that El Salvador’s “leap of faith” has made it easier for them to take the plunge.
“On a macro level, those who will make the decision to make Bitcoin legal tender will be politicians or rulers. Bitcoin is many things – a technology, a store of value, and a means of payment.
It’s also a cultural touchstone and, at its core, an expression of the user’s lack of faith in the global financial system as presently constructed…
What El Salvador did is take the first leap of faith, making similar moves by other countries much easier to consider.”
BitMEX CEO predicts Bitcoin will be legal tender in five countries by 2022
In a Wednesday blog post, Höptner expressed support for El Salvador adopting Bitcoin as legal tender in September, predicting that developing countries will be “leading the way” in Bitcoin adoption:
“My prediction is that by the end of next year, we’ll have at least five countries that accept Bitcoin as legal tender. All of them will be developing countries.”
According to Höptner, developing countries will adopt Bitcoin faster due to three major factors: the growing need for cheaper and faster international remittances, massive inflation, and political issues.
As opposed to consumers in more developed countries, people in developing economies are more affected by issues related to cross-border payments and inflation, Höptner said.
The CEO noted that remittances made up 23% of El Salvador’s gross domestic product in 2020, while the World Bank assessed that low- and middle-income countries receive about 75% of total global remittances. He added that people around the world are increasingly looking at Bitcoin as a solution to weather massive inflation, citing rapid crypto adoption in Turkey amid a 19.2% inflation rate.
Höptner went on to say that El Salvador’s Bitcoin move will make it easier for other countries to consider similar moves. “But if it’s a reality that politics will play a big role in the adoption of Bitcoin as legal tender, it’s also true that any failings by these leaders in the implementation phase may hurt wider adoption of cryptocurrencies in general,” he added.
A former CEO of German stock exchange Boerse Stuttgart, Höptner took over as CEO of BitMEX in December 2020, replacing Arthur Hayes.
Höptner is not alone in thinking that more countries will follow El Salvador’s lead in adopting Bitcoin. Last month, Cardano founder Charles Hoskinson predicted that a lot more countries will adopt cryptocurrencies. World-renowned computer programmer Edward Snowden also believes that “latecomers may regret hesitating.”
Some major figures in the cryptocurrency space have been hesitant to praise El Salvador’s crypto adoption sparked by President Nayib Bukele. On Friday, Ethereum co-founder Vitalik Buterin criticized Bukele’s approach to adopting Bitcoin, arguing that forcing businesses to accept a specific cryptocurrency is “contrary to the ideals of freedom that are supposed to be so important to the crypto space.”
BitMEX in 2021: CEO Alex Hoeptner Explains How He’ll Take the Veteran Exchange to a New Era (Exclusive)
Established in 2014, BitMEX is a veteran derivatives exchange, a pioneer for the crypto industry, which used to be the leading one for a serious period of time. In fact, the traded volume on BitMEX was much more than that on any other derivatives exchange until 2019.
BitMEX exchange had a serious impact on the cryptocurrency market as a whole, and in a sense, helped shape the industry into what it has become today.
CryptoPotato had the pleasure of interviewing Alexander Hoeptner – the CEO of BitMEX. In this episode, we talk about the ever-increasing regulatory presence in the industry, whether it’s good or bad for it, where the market is going to, how’s BitMEX doing after the $100 million CFTC and FinCen settlement, and many more interesting things.
Crypto Similar to Traditional Finance, But Faster
First things first, it’s important to note that Hoeptner comes with a rich background in traditional finance. Boerse Stuttgart, Euwax AG, Deutsche Borse, and so forth are just some of the conventional institutions he had a high-ranked and even executive position at for years before joining BitMEX.
With this in mind, we felt that he’s the perfect person to ask about the overlap between crypto and traditional finance, whether it exists, and to what extent.
“Even if the more crypto-native folks might not like to hear it, crypto is actually, in many senses, like the traditional financial world 25-30 years ago, coming from an unregulated, unstructured world, going to a regulated one and seeing the same impacts that we’ve seen in the traditional financial world 25-30 years ago.”
However, Hoeptner also outlined that the developments that are going on in the crypto field, compared to that in the traditional financial world, are happening at a “much faster pace.”
“What we’ve seen happen in the traditional financial world in the past 30 years happened in 2 years [in the crypto industry].”
Stepping into Arthur Hayes and Ben Delo’s Shoes
A little less than a year ago, the United States Commodity and Futures Trading Commission (CFTC) charged the BitMEX owners with illegally operating a cryptocurrency exchange – a move that came as a shock to the entire community. At the time, spearheading the company was Arthur Hayes – one of the most iconic figures in the field.
It’s worth noting that the corporate structure behind BitMEX is called 100x Group. Not long after the charges, Arthur Hayes stepped down as the CEO, while Samuel Reed, the CTO, did the same.
We asked Hoeptner how it was stepping into the shoes of the previous founding team, including co-founders Arthur Hayes and Ben Delo:
“It is heritage because these are really iconic characters and I’m not them. I’m Alex, I’m not Ben [Delo], I’m not the inventor of the perp. […] I will bring Bitmex to the next level.”
Sharing more details about the current focus of 100x, as well as its structure, he said:
“Firstly, 100x is the holding company behind BitMEX, which is the operation brand. […] The plan is to move into spot, brokerage, custody, information products and surround this with an educational arm because I think and we believe that there is still a lot of educational work to be done to go toward full mass-market adoption.”
He clarified that all of this will be done under the BitMEX brand. The CEO also outlined that the focus on KYC and AML will help them transition to other products, more precisely – spot and custody.
It’s also worth noting that back in January 2021, BitMEX reported that 100% of their trading volume and the user base is entirely verified.
‘We Need to Develop the New Regulation’
The past few months saw a massive focus on regulatory efforts in the cryptocurrency field on behalf of legislative bodies throughout the world.
Hoeptner thinks that it’s “most likely” that regulators will first put crypto into the same buckets as traditional assets. This, naturally, is wrong, according to him, because of the capabilities and possibilities of the tokenized world and crypto in general. However, Hoeptner said that it’s the industry’s obligation to educate together with the regulators of the mass market and tailor the rules to fit the specifics of the field.
“This comes to us. We cannot expect the regulators to be more advanced than us on that space. We need to get to them and discuss and in a process develop the new regulation.”
Throughout the podcast, we also discussed BitMEX’s policy on adding new coins – how do they vet the projects and the specifications around it. Hoeptner also shared his plans, saying that his goal is to bring BitMEX to the next level.
To find out more about what can we expect from one of the most iconic exchanges in our field, tune in and listen to the above podcast