On this week's episode of Yahoo Finance Future Focus, our host Brian McGleenon interviews Vishal Sacheendran, Binance's Head of Regional Markets, to discuss the current state of the cryptocurrency market. Despite bitcoin being down over 20% from its all-time high of $73,000 reached in May, Sacheendran suggests that several potential bullish catalysts could drive a recovery. Sacheendran expresses confidence that the current downturn in bitcoin and the broader cryptocurrency market doesn't signal a long-term negative trend. He points to several factors that could benefit the digital asset, including the anticipated start of a U.S. Federal Reserve rate-cutting cycle and the upcoming U.S. presidential election, where pro-crypto candidates like Donald Trump and Robert F. Kennedy Jr. are making waves. Sacheendran emphasises the increased synchronicity between traditional financial markets and the cryptocurrency market, noting the growing presence of institutional investors and the introduction of Bitcoin and Ethereum ETFs. He highlights that market sentiment is optimistic, with the CME FedWatch tool showing a significant likelihood of a rate cut in September, which could further support a rebound in the cryptocurrency market.
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00:00Today on Yahoo Finance Future Focus, we are joined by Vishal Sachindran, Binance's Head
00:10of Regional Markets, to discuss recent cryptocurrency market volatility and regulatory and compliance
00:16developments.
00:17Vishal, welcome to the show.
00:19Thanks so much, Brian.
00:20It's a pleasure to be here.
00:21Is Binance concerned about the current cryptocurrency market volatility?
00:24I don't think the current downturn is indicative of a long-term negative trend.
00:29If you look at what's happening across in the U.S., the geopolitical factors there,
00:34the elections coming up, and if you then look about, see what's happening in the Middle
00:39East as well.
00:43So all these influence the way the markets have reacted.
00:48But again, like I said, I don't think there should be any long-term impact to be honest.
00:55Yeah, you hinted on sort of like the U.S. elections.
00:58So are there any other catalysts on the horizon that could spur a sustained bull run in crypto?
01:03You have the large scale institutional investors coming into the crypto market as well now.
01:08You have the ETFs that have been accrued across different markets.
01:14So the volatility would now also depend on how traditional institutional investors now
01:19see this asset class as well.
01:24If they decide that they're going to get out of the market, it's going to have a huge impact
01:28on the crypto side as well.
01:30But at the same time, when you have the macroeconomic factors like you just mentioned, everyone's
01:36expecting the Fed rate cuts to happen in September.
01:41And we would then see that as another catalyst to kind of rebound the market and bring it
01:47back.
01:48And we'll see how that goes as well.
01:49So I really think there are those kind of factors that would affect, which would normally
01:55not have an impact on the crypto markets.
01:57But now there's a lot more synchronicity between the traditional financial markets
02:00and the crypto side of the world as well.
02:02There's a lot of recessionary signals out there.
02:04There's a lot of fear that world markets could plunge into a recession.
02:08Now, how would Binance prepare if there was a potentially prolonged recessionary environment?
02:15We are a seven year old company now, and I think through our seven years, we've experienced
02:20quite a few bull and bear cycles with the substantial extended periods of volatility.
02:27Our business model has proven quite resilient to date.
02:31And as crypto use cases continue to develop, we will see greater adoption than before.
02:38And we expect to see the demand for crypto exchanges be even higher than it was before.
02:44Would you say that the demographics that use crypto at the moment are quite narrow?
02:48Like, how do you make it more inclusive?
02:50How do you include possibly people that aren't as tech savvy?
02:54Education.
02:55Education is extremely important.
02:57I think one of the main things that we have been focused on over the last year or so more
03:05has been how we focus on three main things.
03:08One is, like I mentioned before, our users that are the key, most important people for us.
03:13Second is our regulators.
03:15And the third is our partners that we work with.
03:18Now, if you want to grow the pool of people that actually use crypto and want to learn
03:24about crypto, you have to hit them through all these three different points, right?
03:28You have to, there has to be a stronger center of education.
03:31And I think our Binance Academy teams have been working very closely with universities
03:35across the region.
03:37We are working very closely with law enforcement across the region on training law enforcement
03:42agencies on how to catch bad actors who use crypto for the wrong things.
03:47Those are the kind of things we hope that will grow that user pool.
03:51And regulations give users the protection and the clarity that, hey, we're not doing
03:57something crazy by investing in some policy scheme, but we're doing something that is
04:01highly regulated.
04:02And this is an industry that has a new asset class for us to invest and work our way towards
04:07financial freedom.
04:08When we look at the markets in crypto assets, regulatory framework that the EU have just
04:15brought in.
04:16Now, I suppose it's coming in stages.
04:18I think it's fully implemented or fully goes into action this December.
04:22What do you think are the positive elements from what the EU have done here that UK regulators
04:27could take and possibly emulate?
04:29And also, what are the pitfalls that UK regulators could possibly circumvent and avoid?
04:36As an ex-regulator, I think we were, I was part of a team that was one of the first in
04:41the world to roll out crypto regulations globally.
04:45And I've been then since dealing with regulators across the world who had different stages
04:50of rolling out regulations.
04:52Mika is a one regulation that actually oversees an entire region, which is phenomenal.
05:01It's amazing to reach this point, right?
05:04And if you see us as Binance, our top priority in Europe is compliance and preparation for
05:09the implementation of Mika towards the end of the year.
05:13We're exploring the best options for ensuring that we are able to continue to offer products
05:17and services in the EU.
05:18We're making our necessary changes to the way that part of the structure and the corporate
05:22governance in the EU.
05:24And we'll provide updates on how we are working with Mika and within the EU regulations as
05:31an appropriate.
05:32I don't think it's, there's ever going to be a perfect regulation, but regulation should
05:36always be having the users at its focus and driving innovation as opposed to stifling
05:44innovation.
05:45It should be fostering it as opposed to stifling it.
05:47So in that respect, I think the EU has got that.
05:51Hopefully they listen to the users and that's something the UK should learn as well.
05:55Yeah, the only specific things that the UK regulators could look at and say, okay, we
06:00could be a little bit more agile here, or we don't need to be as prescriptive as Mika
06:06for this area.
06:07There are a few, right?
06:10You have to see how some of the things shouldn't be as prescriptive when it comes to some things
06:15like stablecoin issues or universal station, or even how they look at different parts of
06:22trying to figure out which business model companies should be using to set up shop in
06:28the EU.
06:29I think that should be decided by the business on how they would seem it best fit and continue
06:36having those competitions.
06:37Well, it's important that before you roll out these frameworks, you continue having
06:41competitions with the players in the market who service their markets and see what works
06:44best and what is the risk capital from a regulatory perspective and what mitigants they're willing
06:49to put in place to address those risks and those are the key things.
06:54Vishal Sachindran from Binance.
06:57Thank you very much for coming on this week's episode of Yahoo Finance Future Focus.
07:00Thanks so much, Brian.
07:01It's a pleasure.