Guy Hirsch, US Managing Director of eToro: Crypto Trading Will Change the Financial Industry

Crypto markets are not promising guaranteed returns, but trading may be as strong as ever. Cryptovest reached out to eToro for an exclusive Q&A session, with an encouraging message for the opportunities of crypto trading.

Q. How do you select crypto assets for eToro? what are the features that help you estimate whether a rather novel asset, like Cardano, would be a good fit?

A. eToro’s main criteria for selecting new crypto assets is liquidity. There is strong demand for new crypto assets on our platform, but the supply side is the issue. Before we list new crypto assets we want to make sure that there is sufficient liquidity from multiple liquidity providers.

Q. In your experience building crypto trading systems, how is it different from forex? What is the type of investor interested in crypto?

A. Forex is a very well defined asset class with certain characteristics. Crypto is a word used to describe an all-encompassing way of storing or exchanging value across all asset classes. A crypto can be pegged to a currency, a commodity, represent a new asset class or be means of exchange for participants in a non-sovereign network. While the typical investor in crypto tends to be a millennial male who is relatively savvy with web services, we see shifts and wish to encourage a broader set of users participate in these new global markets.

Q. What are the legal challenges to expanding to the USA? How does eToro plan to deal with those?

A. Our global business has valuable offerings that in the US fall under different regulatory regimes at the federal and state level. Couple that with the given challenges for any participant in the crypto markets and you get a myriad of complexities. We plan to deal with those by analyzing each business line on its own, understand the path to compliance in each and then execute. We will coordinate internally and work with outside counsel and other resources to navigate through these processes.

Q. Is crypto trading over, or has it just begun?

A.It has just begun. It will change the way the financial industry is currently working.

Q. In theory, eToro buyers can choose to hold the crypto asset outright. How much is this feature used? Do crypto traders also want to own the asset?

A. We are making the selection for customers if they’ll hold the assets outright or not. US customers will hold their assets out right and we will custody those assets for them. Some crypto traders definitely care deeply about these questions and our wallet will widen the opportunities for those and others to own and use their crypto assets.

Q. How do you see crypto technology combined with the world of traditional finance? Do you think the technology is robust enough?

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

A. We think crypto assets will completely transform traditional finance. From payments to credit markets to contracts, this technology will make things better, faster, cheaper and more trusted. The different blockchains vary in terms of scalability, efficiency and trust, but we have even a longer way to go when it comes to use cases, interfaces and adoption. Having said that, all those will evolve over time and we’ll eventually see similar if not greater levels of usability and adoption as in web and mobile apps.

Q. What need does eToro serve in a world where crypto exchanges dominate the market? Do you consider markets like Binance a competitor, or not at all?

A.We announced our exchange during Consensus and we are working hard differentiating it. Because of our other lines of business we have some key and built-in advantages. We partner with other exchanges for multiple reasons and looking forward to expanding those relationships and forming new ones.

Q. Do you expect US trading and sentiment to be different from the European approach?

A.Yes. Certain key use cases, adoption of crypto and variants in government attitude will lead to noticeable difference in how an American and European customers view the crypto asset markets. This may be due to different tax schemes or other differences that objectively change one’s outlook on markets.

Q.What other crypto assets is eToro looking to add?

A.Those with sustained and substantial liquidity.

Guy Hirsch is the USA Managing Director of , the world’s largest social investment network. Guy leads eToro’s expansion into the United States with a focus on U.S. cryptocurrency and blockchain strategy.

Prior to joining eToro, Guy served as Director of Innovation Strategy at Samsung SDS, the enterprise IT solution subsidiary of Samsung group, where he oversaw architecting, development, piloting and learning of experimental AI and IoT solutions and evangelized digital transformation projects at the C-Suite level. Guy also previously led Samsung Electronics (KS:005930) America’s retail innovation team, where he spearheaded Samsung’s efforts as the leader in consumer electronics retailing. Guy has an LL.B and a BA in Business from the IDC Herzliya in Israel.