Octagon Strategy, Hong Kong based commodities and digital assets trading house, took its first steps in the field of Bitcoin in 2016. Recently it commenced trading in the second most popular cryptocurrency: Ethereum which it describes as „a rising star in the digital assets space”. We asked Dave Chapman, managing director of Octagon Strategy, about what spurred him to enter the new market and how he envisions the future of cryptocurrencies.
You launched in 2016. Was Bitcoin your only area of interest at the beginning?
Dave Chapman: I have always had a career in the banking and technology field, working with some of the world’s largest financial brands. So when I first came across the concept of Bitcoin, I found it very interesting and appropriate for me to bring this concept to a wider audience by utilizing my experience in trading technology. I co-founded a company called ANX International in 2013, which primarily focuses on blockchain solutions and is one of the largest blockchain solution providers in the world, serving over 3 million customers in 50+ countries. The company also runs one of the longest standing crypto exchange platform in Asia, ANXPRO, supporting bitcoin and altcoins trading like Litecoin and Ripple. In 2016, we were witnessing a surge in demand for large blocks of bitcoin and other digital assets, which is why I started Octagon Strategy. As of today, Octagon Strategy is the largest OTC trading desk in APAC, specializing in digital asset and commodity trading.
What drew your attention to Ethereum? Was it just the investors' willingness to diversify or do you believe in the inherent value of this currency?
DCh: Interests in diversifying portfolio and growing attention on Ethereum smart contract are both triggers for us and our trade partners to tap into the Ethereum field. In fact, according to a CoinDesk research, almost 94% of respondents feel positive about the overall state of Ethereum, which indicates a very promising future of the technology as more and more developments are expected to be made surrounding Ethereum.
Ethereum is more than a cryptocurrency. It’s also a software framework. How do you estimate its potential as such and the variety of its possible applications?
DCh: Smart contracts extend to lots of functions, such as supply chain, trade finance, digital identity and land registry. One recent hot topic are token sales; many companies are releasing their own tokens based on Ethereum technology. In fact, I am serving as one of the founding directors on the recently launched openANX initiative, in which its OAX tokens are based on Ethereum ERC20.
Investing in cryptocurrencies is a high-risk businness. What criteria should you use picking the specific currency for investment?
DCh: Octagon Strategy does not provide investment advice, it merely facilitates the ability for trading partners to either acquire or sell large blocks of digital assets. The minimum tickets size is USD 50,000 of equivalent.
Cryptocurrencies are at the early stage of evolution. Do you believe that in, say, ten years, we’ll have a free market of currencies competing with one another, or we’ll be heading towards more regulated, unified financial system based on fewer cryptocurrencies?
DCh: This year we saw quite a number of new developments from regulators around the world – China regulators tightened KYC/AML control across major crypto exchanges; Japan legitimized bitcoin as a legal form of payment; the bitcoin ETF got rejected by SEC and later the decision got reviewed again; Barclays has just announced that they are in discussion with Britain’s Financial Conduct Authority (FCA) about how cryptocurrencies fit into the existing financial system. All of these factors prove that regulators are looking at the crypto space and planning on setting up rules to govern the usage of cryptocurrencies. This is positive for the entire ecosystem.
Interviewed by Przemyslaw Cwik