Another trend in the cryptocurrency space is structured products, such as bitcoin futures and options. Matrixport, a spinoff from blockchain and crypto mining giant Bitmain, is active in this market. Cynthia Wu and Daniel Yan, both of Matrixport, spoke with Nisa Amoils about the state of crypto trading in the Asian markets, their strategy for retail investors and the climate for bitcoin in China. Daniel Yan, who is Matrixport’s chief operating officer, explained the company’s strategy for retail investors, saying,   

“The futures product is much more natural for them because it is just a leveraged spot of that; just think from retail’s perspective, it’s a linear transformation. But options, given the linearity, it can get a little confusing. So at this moment, I think not only with us, with everyone, all the retail products in the cryptocurrency world, I think most of the retail customers, they understand how to use structured products to earn money, which is embedded with options. But it’s generally difficult for them to understand how to just use options as a product to trade and how to trade it. It’s generally, very few people know. So that is definitely a big workload we need to focus on in the next year in part of our retail strategy, that is we need to provide quality content to help retailers understand how to use this product.” 

Matrixport’s Cynthia Wu explained how in China, bitcoin is not looked upon as money but instead is defined as a liquid asset and is grouped in the virtual commodity bucket. She explained that this perception marks an important difference vs. other jurisdictions that are still pushing for the crypto payments use case, which she says explains a lot about the stance of the Chinese government, adding: 

“I would say that China has not prohibited crypto outright, and actually in November last year the authority of the Chinese government actually said that bitcoin mining will not be an illegal industry in the country, which I think gives relief to people worried about the sustainability of bitcoin mining in China. But China prohibits token funding and also trading platforms from engaging in…business between the legal tender of the country and the cryptocurrencies. So I think that’s still going to be the case going forward.”