Evgeny Gaevoy began his career in traditional finance, specializing in the market and support trade. But for 2016, seeing the inefficiencies of inherited financial systems and the potential for disintermediation, Gaevoy realized that there was an opportunity to create something completely and better.
With experience in the construction of the European ETF business of the Firm of Currencas Optiver, one of the largest in the EU, decided to launch an algorithmic commercial company designed for the era of digital assets. Since 2017, Wintermute has become one of the largest suppliers of commercial and liquidity suppliers in cryptography, processing more than $ 5 billion in volume of daily negotiation and providing deep liquidity to more than 50 commercial places in centralized and decentralized exchanges.
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Here, Gaevoy, who will speak in the Hong Kong consensus, discusses how Asian cryptographic markets differ from those of the West, how it predicts that AI will be used in trade and the realization of the market and how winter is responding to the growing fragmentation of liquidity in multiple blockchains.
This interview has been condensed and slightly edited for clarity.
What led you to start the winter?
I began to investigate the block chain around 2016, which is relatively late compared to some of the first users. At that time, I was in traditional finances and what really interested me was disintermediation, eliminating the inefficiencies of the custodians and the main corridors, which were painfully slow in the way they operated. Blockchain seemed an excellent way to interrupt that.
But at that time, everything felt very theoretical. It was not until 2017 that I really got into crypto. I left my job, I began to look around and bought a small amount of bitcoin in Coinbase, just to try it. Then he doubled in a price in a weeks, and barely paid attention because the volatility was so crazy compared to what was accustomed in tradfi.
In the manufacture of the tradfi market, there are perhaps 10 days a year when things become really exciting, when the markets move 3-4%, and that is considered a big problem. But in cryptography, that type of movement occurs all the time. So I thought I know the accessory trade, I know the manufacture of markets and I like to build things from scratch, so why not build a market manufacturing business in cryptography? This is how the winter chest became.
You have actively participated in Western and Asian markets: What are the biggest differences you have observed between the two?
As for regulation, everything is still mainly driven by the United States, even in Asia, most companies observe what the United States is doing instead of establishing its own independent course.
When it comes to OTC and institutional trade, China is the largest piece that is missing. Chinese institutions and corporations cannot yet touch cryptography, and until the Chinese communist party changes its position, we will not see the appropriate institutional flows from there.
What key opportunities are you watching Asia at this time?
The most interesting development at this time is how certain countries open to cryptography significantly. Japan is becoming increasingly attractive due to its improved fiscal policies for cryptography. By reducing tax burdens in cryptography holdings, the country is facilitating both companies and people participating in the market without excessive financial sanctions. This is a significant movement that could boost liquidity and institutional participation.
South Korea is another exciting case, mainly due to its massive retail market. However, an important limitation is that foreign market manufacturers are still restricted to integrate with local exchanges. If regulators allow external liquidity suppliers to participate, it could unlock a huge amount of liquidity. At this time, Korean exchanges remain quite isolated, so we still see phenomena such as cousin Kimchi, a direct result of structural barriers that prevent global liquidity from flowing freely to the market.
Hong Kong, on the other hand, plays a unique role as a pilot program for China. While China still officially prohibits cryptography, Hong Kong is establishing regulated markets and institutional frameworks that could serve as a field of evidence of how China could interact with cryptography in the future. This makes Hong Kong an important region to observe, especially in terms of institutional adoption.
The key to be seen is how these markets evolve, since each one offers different entry points to the Cryptocurrency Adoption cycle of Asia: Japan is attracting institutions with tax incentives, Korea is a retail market with possible liquidity unlocks, and Hong Kong A regulatory is a regulatory. Experiment that could have broader implications for China.
What have been some of the less known or unexpected catalysts that drive the adoption and liquidity of cryptography in Asia?
The biggest surprise for me is that many of the stories we see on Crityto Twitter and VCS do not reflect what is really happening on the ground.
A great example is Tron and Tether. In Asia and Latin America, the USDT in Tron is the most used cryptographic active for payments, especially for non -banking and those who seek to escape the devaluation of the currency. But in the West, nobody talks about that. There are also many projects and protocols that are ignored in the Western Eco Chamber, but they are very good in Asia. That is why I think it is crucial to keep the pulse of what is happening in Asia, instead of only trusting western narratives.
Do you think the AI will ever execute a complete market manufacturing operation?
The AI is already widely used in commerce, and has been for a long time. Automatic learning is nothing new: companies have been using it in support trade for years. What is different now is how many more advanced models are obtaining and how much unprocessed computer power is being launched to the problem.
Take XTX, for example, (another algorithmic trade firm): they have a crazy quantity of GPU dedicated to automatic learning. They are even building large data centers in Finland only to manage their AI models. It is not something new in trade, but the scale to which it is being implemented is increasing rapidly.
Will IA completely replace human merchants? I do not believe it, at least not in the next 5-10 years. The biggest limiting factor is how much can automate.
At this time, it has different styles of market -manufacturing companies, some depend largely on AI, while others still have many human contributions. Winter hunger falls somewhere in the middle. We use where it makes sense, but there is still a lot of human decision -making, especially when it comes to the dynamics of the market that the AI does not yet understand completely.
The real challenge is to adapt AI to a market like Crypto, which is still highly unpredictable and lacks structured data sets to which traditional financial companies have access. AI is excellent in patterns recognition, but still fights with black swan events and highly volatile markets. Until AI reaches a level at which it can fully adapt to unexpected changes in the market, humans will still play an important role.
How is the winter row approaching the challenge that liquidity is increasingly fragmented in different blockchains?
In Wintermute, our central strategy is to facilitate and promote as much diversity as possible when it comes to block chains, centralized exchanges and decentralized exchanges. We do not see fragmentation as something bad, it really creates more opportunities for us.
At this time, we are connected with all the main centralized exchanges, a wide variety of OTC counterparts and dozens of defi ecosystems. This diversity is our competitive advantage. Instead of waiting for the market to converge, we adopt fragmentation and position to be everywhere liquidity.
Could things get more centralized over time? Maybe, but I don’t believe it, at least not in the way tradfi works. In traditional finance, it has CME for derivatives, some dominant values bags and a relatively small number of key players.
Crypto is different. It is inherently decentralized, and I think it will remain like this. There will always be new blockchains, new commercial places and new liquidity swimming pools. Instead that everything is consolidated in some great players, I think we will see a continuous expansion of ecosystems, and companies such as Wintermute must be agile enough to operate in all of them.
What is most excited to discuss on stage in Consensus Hong Kong?
One of the things I would like to talk about is the structure of the market and the role of cryptography market manufacturers. There are so many erroneous concepts about what we do. For example, if you go to Twitter crypto, you will see people blaming market manufacturers for causing price accidents, which is not how it works. There is this huge misunderstanding about what market manufacturers really do, how we operate and how we provide liquidity. I would like to dissipate some of those myths, explain how the market really works and maybe even challenge some of the false narratives that exist.
