An Interview with Dr Martin Hiesboeck, Head of Blockchain at Uphold
As the hectic year draws to a close, there's still uncertainty about how long the crypto winter will last and if the crypto community should be prepared to face unanticipated events in the foreseeable future.
iHodl had the opportunity to speak with Dr Martin Hiesboeck, Head of Blockchain and Crypto Research at Uphold, about what catalyst might trigger a new bitcoin bull run, what to expect from the market in 2023 and how's Uphold doing these days.
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Q. Can give us a hint on what's coming for the crypto market in 2023? It appears that many crypto exchanges continue to downsize their resources to weather the bear market.
A. Despite everything that’s been going on in 2022, I do believe we will see new levels of institutional adoption in 2023. Of course, right now many institutions are spooked and are afraid to extend new money into the crypto space, and existing firms are in many places downsizing. However, in the coming year we will likely see new regulations that actually provide clarity on how banks and money managers can properly engage in this space, as well as licensing options for exchanges and other institutions. That will drive more confidence, along with these firms doing more of their own internal Due Diligence.
Along with more institutional players getting in the game, you will also see more crypto services being integrated into existing, non-crypto applications. Users want to be able to access all of their financial options under one roof, and I think we will see various institutions respond to that and offer, say, the ability to buy Ethereum alongside options for buying stocks and other investment vehicles.
Q. Should we expect new VC hype before the next bitcoin halving or the crypto market is doomed to undergo a recession first?
A. For the time being, we will likely continue to see roughly the same sideways action we've been seeing for a while now. Considering just how volatile the world is right now, it's actually pretty impressive that bitcoin is holding as well as it has been. This is likely because smart money knows it's only a matter of time before the bull market returns, so nobody is really selling. Instead, many investors are buying the dips, which is helping to stabilize the market.
A likely catalyst for bringing back the bull market could be the end of the war between Russia and Ukraine. In times of war, money tends to flow into safer places, like the US Dollar. However, once an end is found, you can expect a lot of that capital to flow back into places like crypto. If this coincides with the next halving event, then all the more so should we expect to see significant upside in market valuations. Again, there are many in the market who understand this and are just waiting to see how these situations play out.
Q. How's Uphold doing amid this hurricane?
A. Uphold is in a strong position currently, thanks to our ultra-conservative business model and constant calls for greater transparency in the industry. As a matter of standard operating procedure, we never loan out customer money and are, and have always been, 100%+ reserved. Uphold is actually the only financial institution that publishes our complete assets and liabilities on a public website with updates every 30 seconds. As a firm regulated in the U.S. by FinCen, and in the U.K. by the FCA, we have to undergo regular audits and operate within the strict terms of our licenses.
This combination provides much greater security than just on-chain Proof of Reserves, since it combines license requirements, independent audits and real-time transparency all in one. All of our clients can be completely sure that their assets are not encumbered with us and are available whenever they need them.
Q. Any hints on what's new Uphold might bring for users in 2023? Perhaps a self-custodian crypto Web wallet or an NFT marketplace?
A. Uphold is always looking to integrate new products, features and services whenever we think it will improve the lives of our customers. We are committed to growth in 2023, and our users can expect more of the same top-rate money management that they’ve grown to expect and trust.
Hiesboeck added that markets are showing more signs of stabilizing than increasing panic so far as Digital Currency Group — a parent company of the troubled crypto broker Genesis — has "successfully allayed fears, and while equities seem to be overbought short term, there is talk of a Santa Rally since we all could use a nice bonus after a stressful year."
Speaking about blockchain startups, Hiesboeck said that Quant especially has seen a "spectacular rise in the number of addresses holding it, over 12% on Uphold alone." He said:
"They have ratcheted up their marketing extensively and we are in the process of arranging an exclusive roundtable event with them. We consider UK-based Quant the most important project for enterprise and institutions given its fast and secure Overledger architecture."
He noted, however, that Uphold doesn't see the future of the project in central bank digital currencies (CBDCs) but in enterprise adoption.
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