Jesse Powell, co-founder and chief executive of San Francisco-based cryptocurrency exchange Kraken, has some words of wisdom for investors. While securities regulators are looking for ways to protect investors from any fraudulent activity that might arise in unscrupulous ICOs, Powell, while speaking to CNBC at the World Economic Forum in Dubai, put the burden to investors. But he also offered a bullish take on the cryptocurrency market in 2018, pointing to a future combined market cap worth $1 trillion.
“I think ultimately consumers need to look out for themselves, look into the fundamentals of any coin and not rely on any particular exchange to protect them from market volatility,” Powell said.
It’s not that Kraken, the largest bitcoin exchange based on euro volume and liquidity, doesn’t have traders’ backs. The exchange has a rigorous vetting process for any new coins looking to list there. But considering that Kraken is one of the leading exchanges that ICOs want to list their tokens on, along with the likes of Bittrex, Poloniex, and Binance, that’s no small feat.
“We make no promises about the future of any coin, things can change when you raise $1 billion in 10 minutes,” he added.
The comments come on the heels of a multiple-day systemwide outage that Kraken suffered in January while they were upgrading their trade engine, an event that was supposed to take a couple of hours. And while Kraken wasn’t hacked, the outage spooked cryptocurrency traders.
Powell’s remarks on the risks associated with cryptocurrencies come as policymakers around the world are grappling for tighter control over the market. EU regulators, for instance, just issued a joint warning to investors about “highly speculative” cryptocurrencies, urging them to refrain from investing more than they can afford to lose.
While sobering, Powell’s remarks weren’t all cautious. He also believes total cryptocurrency market cap could reach $1 trillion in 2018. He is bracing for an “acceleration” in the market whose catalyst is a rising generation of talent.
“You’ve got a lot more kids graduating from crypto programs at universities now. I think we’re just going to see it continue exponentially from here,” he told CNBC.
His sanguine view, particularly in light of the bumpy start that cryptocurrency trading got off to amid a heightened regulatory focus around the world, is music to the ears of investors and echoes a similarly bullish call from the Winklevoss twins. They predict the potential market cap for bitcoin alone at $4 trillion, though that’