Cryptocurrency Exchange BitFlyer Seeks to Connect World’s Largest Bitcoin Investors

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EXCLUSIVE — With its recent launch in the U.S., cryptocurrency exchange bitFlyer wants to bridge the trading gap between two of the world’s largest bitcoin markets.

“Japan is the largest bitcoin trading market in the world, about 50% of it happens in there; the U.S. is the second biggest market,” Bartek Ringwelski, chief operating officer at BitFlyer USA, told Bank Innovation. “The value proposition lies in allowing these two markets to interact and being able to unlock liquidity for our customers in Japan.”

Based in San Francisco, Calif., BitFlyer — which claims to be the largest cryptocurrency exchange in Japan — launched in the U.S. in 42 states last week. The last state it received approval is New York, which has only approved four other cryptocurrency exchanges so far.

“The process was incredibly vigorous and took months,” Ringwelski said. “[New York] is setting the benchmark for the standard that will continue to evolve, and they are at the forefront in the U.S. on how to create a safe and thriving cryptocurrency market.”

For now, bitFlyer has launched with just bitcoin, but will be adding other altcoins like Ethereum and Litecoin in 2018. When they will be launched, Ringwelski declined to say.

The goal for bitFlyer is to focus on financial institutions and institutional investors, he said. Unlike in Japan where most of the bitcoin traders are retail investors, in the U.S. are institutions.

“This institutional focus for [bitFlyer] is built into our DNA,” Ringwelski said. “Our two founders are Goldman Sachs alumni that built the trading infrastructure there, so this is an important part of who we are.”

As for bitcoin, Ringwelski acknowledges that the price of the alt-coin is “changing a lot, but we believe in bitcoin,” he said, adding that 2018 will likely be the year that bitcoin will transition to an asset class investment for institutions, giving it the much yearned for legitimacy it needs.

Ringwelski said it was too soon to disclose any trading volume or value in the U.S., but in Japan, according to TechCrunch report, bitFlyer trades $180 million worth of bitcoin per day.

“BitFlyer’s entrance into the U.S. — as well as its announcement that it plans in 2018 to add support for certain other tokens, such as Litecoin, Ethereum, and others — will expand the number of places where consumers can purchase tokens,” Joshua Ashley Klayman, head of Morrison Foerster’s Blockchain + Smart Contracts Group, told Bank Innovation. “This could cause increased price competition among exchanges, which might result in lower transaction fees.”

Bitcoin is trading at $15,979.01 as of 10 A.M. today.

To learn more about the latest developments in cryptocurrency and blockchain, join us on March 5-6, 2018 at the Parc 55 in San Francisco for Bank Innovation 2018. Click here to register.

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