The recent cryptocurrency value jump to over $50,000, driven by institutional demand, where Tesla’s $1.5 billion investment in Bitcoin is the latest example, has refocsed the attention on the emerging digital asset ecosystem. As companies and individuals look for new asset classes hedge their investments, the demand for easily accessible and regulated solutions grows.
As the interest in digital assets gains traction, so does the need to find regulated solutions for digital asset trading. While the US’ answer came with Paxos—Paypal partner in digital asset trading, HFinance is the go-to alternative for Europe.
HFinance is the first solution in the EU to offer a 100% regulator compliant digital asset trading solution that established financial institutions and/or fintechs can integrate into existing infrastructure via native API. Recently, HFinance noticed a sharp increase in financial institution inquiries, while simultaneously seeing trading volumes grow, making around 12 million EUR (14,5 M USD) in monthly transaction volume, circulating roughly 30,000 transactions per month, projected to increase at least 100% in February.
HFinance credits their growing popularity to the ease of their tech solution integration. Integrating a solution, as opposed to developing one from scratch, allows financial institutions to offer digital assets (i.e. bitcoin) trading to existing customers and be AML compliant in roughly two weeks, as digital asset trading becomes highly sought after by retail investors around the world.
“Tesla’s move to invest in Bitcoin and move to accepting payments in cryptocurrency is quite monumental,” said Vytautas Zabulis, HFinance CEO. “2017 was all about blockchain hype that had little to go on other than the fascination of its potential, whereas now, we are witnessing the adoption stage, propelled by interest to hedge against devaluation of fiat currencies. Stimulus packages have decreased USD/EUR currency value, further propelled by 0% or negative interest and asset inflation. Companies and individuals are looking for new asset classes to save their money from losing value. As such, there is rising interest from financial institutions to offer digital asset trading beside stock and ETF trading.”
Retail investors have made headlines recently, with major unprecedented activity in stock trading and while many seasoned investors believed this was a short-lived phenomenon, the increased activity by retail investors indicates rising need for easy access to asset trading. Financial institutions seem motivated to attract this investor cohort, since trading assets increases client retention, while trading creates an ongoing relationship with the platform where trading happens.
“While just a few years ago—crypto trading was mainly taken up by enthusiasts, who were not intimidated by crypto wallets or private key safety, it is not possible to trade crypto without leaving the comfort of a preferred financial institution—be it a bank or a challenger bank. Crypto or gold could be traded alongside other daily financial transactions, which is the solution that we can integrate through HFinance API”, explains Mr. Zabulis. “Everyone deserves the right to choose where to invest and sell and there is a big momentum in the industry for decentralizing financial modules, empowered by innovative technologies.”
The changes are continuing to happen in the financial market because of the growing accessibility of the trading market, as demonstrated by increasing popularity of apps like Robinhood or eToro. As technology typically follows user demand, financial institutions that offer stock trading to their clients will inevitably begin offering digital asset trading, NFT trading, DeFI and all other digital asset products. Advances in regulatory framework will further propel opportunities for crypto trading in Europe, though MiCA (Markets in Crypto Assets) framework that will focus strongly on rules to regulate currently out-of-scope crypto-asset types such as stablecoins as well as crypto-asset service providers.