Another year of Binance Blockchain Week has come to an end, and Bitcoin has set a new historical high after the expectations of Trump's election were realized. The massive volatility and excellent sentiment have, of course, benefited the trading platform the most.
As the still the world's number one cryptocurrency trading platform, Binance's every move has a significant impact on the industry. Of course, in terms of trading, in addition to the huge base of retail investors, institutional investors are also a very important part, and to a certain extent, institutions are even more important than retail investors for Binance.
To understand the operations and thoughts of institutional investors, BlockBeats interviewed Catherine, the head of Binance's institutional and VIP business, during the Binance Blockchain Week. Catherine has rich experience in traditional finance, having worked at both JPMorgan and Morgan Stanley, and joined Binance in 2021 to oversee the institutional and VIP business, and has been involved in several of Binance's innovative projects, such as "Binance Wealth".
In the interview, Catherine introduced the operations of Binance's institutional and VIP business, and also shared with us the changes in Binance after the post-CZ era, the impact of the election, and the views of institutions on Crypto.
Why did you join and choose Binance? What are the institutions and VIPs doing?
In each bull and bear cycle, countless industry elites from traditional finance, whether they are well-known multinational financial giants or practitioners in various financial fields, are attracted by the charm of Crypto. The entire Crypto circle has become more and more brilliant with the addition of these traditional industry elites. From JPMorgan and Morgan Stanley to leading Binance's institutional business, Catherine is one of those "cross-border" transformers.
BlockBeats: You have previously worked at top traditional financial institutions like JPMorgan and Morgan Stanley (both companies originated from J.P. Morgan & Co., but were split into two independent companies in 1935. Morgan Stanley became an investment bank, while J.P. Morgan became a pure commercial bank and developed into today's JPMorgan Chase. JPMorgan is referred to as "JPM", while Morgan Stanley is referred to as "MS"), can you introduce your background and experience?
Catherine Chen: The most common backgrounds of people coming from traditional finance to the Crypto circle are two types: the first is foreign exchange, and the second is derivatives. I have always been dealing with derivatives, so for people like us who work with derivatives, "cryptocurrency" is a very easy-to-accept and understand concept. I actually knew about cryptocurrency very early on, but it wasn't until 2020 that I decided to fully immerse myself in this industry. This is closely related to my professional background, as people who work with derivatives are more likely to accept and embrace Crypto.
But I may be a little different from the general traditional finance people. In fact, I am not engaged in trading business, such as placing orders in the trading room. I have always played the role of a "micro-entrepreneur" in the company.
When I was an intern at JPMorgan, JPMorgan wanted to enter the Taiwanese insurance market, but was unwilling to spend a lot of costs and take high risks to develop it. So they gave this task to me, just an intern. From that time on, I have been doing "market development and product innovation" work, and successfully launched the first annuity-type product on the Taiwanese market.
Then in 2014, I joined Morgan Stanley. Morgan Stanley was the market leader in cash trading, but its derivatives business was probably not even in the top ten. At that time, they recruited me to manage and be responsible for the growth of Morgan Stanley's entire derivatives business. Later, I also went to develop the entire Taiwanese derivatives business market, and then based on Taiwan, radiated the entire Greater China region, achieving very outstanding results. Before officially coming to Binance, I was responsible for Morgan Stanley's entire Greater China business except for cash, and during my tenure, I also kept launching new products and services.
BlockBeats: What factors prompted you to come to Crypto and join Binance at the time?
Catherine Chen: As for why I left traditional finance and came to Crypto, it's because I felt that in the bank, no one was doing innovation, and they were extremely risk-averse when it came to new businesses. In the first 5 years I came to Morgan Stanley, I was able to smoothly implement new businesses, and later I also helped the bank really complete several projects, but later on, it became very difficult to promote new projects. The committees in the bank need to consider all kinds of things, and no one is willing to take the lead and make decisions on new businesses. Everyone doesn't want to take on the responsibility and risk that comes with new businesses. You will face endless committee negotiations, risk control, compliance, and legal issues, and you can't really innovate in the traditional industry.
I am very clear that I like to "build", I like to promote new businesses. I want to pursue the "feeling of being alive", I want to experience a rich life. But in the bank, it's a top-down constraint. So I decided to leave the traditional big-name financial institution, and with my enthusiasm, I immersed myself in Crypto. I want to be a part of the future, not a part of the past!
BlockBeats: From your perspective, what are the differences in investment preferences between retail and institutional investors?
Catherine Chen: Please allow me to first introduce Binance's VIP Program. At Binance, all systems, departments and activities are very transparent, including the VIP Program I am responsible for. Binance VIP is divided into levels 1-9, with 1-9 having different dimensions. Among them, ordinary users (i.e. retail investors) are level 0, and basically everyone except ordinary users can be called VIP. Whether you are an active trading user, a large holder, or investing in Binance products, or doing lending on Binance, as long as you meet the threshold standards, you can become our VIP.
Among the VIPs at levels 1-3, we call them high net worth clients. Many people don't know that, for example, having $100,000 in holdings plus a certain amount of BNB can make you a VIP 1. From VIP 3 onwards, there will be more and more institutional clients, and at VIP 8 - VIP 9 there will be a lot of high-frequency trading institutional clients.
So what is the biggest difference between institutions and retail? Institutions usually use programs or APIs for trading, while retail investors do not have technical advantages and usually trade on mobile phones. The vast majority of ordinary trading users usually participate in range trading, new coin offerings, and wealth management, with relatively single investment behavior. Institutional users' participation methods are relatively more diverse, in addition to pure trading, institutional users will also do lending and other investments to maximize the utilization of funds.
After the election, Binance's perspective on global regulation
The 2024 bull market cycle was kicked off by the narrative of the Bitcoin ETF. After the favorable news was realized, regulation became the first hurdle for cryptocurrencies to integrate into the mainstream market. Whether it's the SEC's FUD on certain tokens, or the successive approvals of ETFs, regulation and crypto assets seem to be a pair of happy enemies. At the same time, Trump's victory, the first "Bitcoin president" in history, means that the integration of digital currencies into mainstream assets has been accelerated. Catherine provided us with the institutional perspective and views on regulatory issues, and she believes that regulation is a positive thing for Crypto, and Binance will also actively cooperate and embrace regulation.
BlockBeats: As Bitcoin and other major cryptocurrencies are gradually being accepted by the traditional market, how do you view the regulatory issues of Binance and crypto assets at the moment?
Catherine Chen: With the approval of the BTC ETF, regulation is the inevitable path for cryptocurrencies. Regulatory certainty and a clear regulatory framework are necessary. I think the Crypto industry has reached this point, and if we want this industry to continue to shine, embracing regulation is an inevitable choice.
As for Binance, we are also actively obtaining licenses in various places. Because the certainty of the regulatory framework is very necessary. And as a global exchange, compliance is very important. If Binance wants to serve the next 1 billion level of users, it needs to provide them with the trust of regulation.
Originally, some government officials did not fully understand Crypto, but since they have taken the step of regulation, it shows that they are willing to understand Crypto and accept Crypto. In the big picture, regulation is a good thing for the crypto industry.
Binance definitely embraces regulation and compliance, and we are also very actively doing this. To date, we have obtained licenses or registrations in 20 jurisdictions globally, ranking first among all centralized cryptocurrency trading platforms, and we hope that more friendly regulatory measures can be introduced in all regions. Faced with increasing regulation and rules, I think this is a process of "educating" the traditional Web2 market. Currently, there are more native players in the crypto industry, and we are also actively collaborating with various regulatory authorities, hoping to bring more people from outside the industry to Web3 and explore the new continent!
BlockBeats: The biggest narrative right now is the US election, and the market is expecting a positive impact if Trump wins. What do you think about the regulatory adjustments if Trump wins? What impact will it have on Binance?
Catherine Chen: Regardless of who wins, Binance will continue to invest in compliance. Because compliance and regulation are not only important for Binance, but also for the entire industry. Everyone is saying that the era of institutional investors is coming, and if Binance does not solidly comply and reach the same level as traditional finance, it will be difficult to gain the trust of traditional investors.
Of course, Trump has shown a friendly attitude towards cryptocurrencies in some public occasions, and we are also optimistic about this. If Trump is ultimately elected, we also hope that his rhetoric will be consistent. In general, we are also looking forward to it, but for Binance, our path is unwavering regardless of who is elected.
What changes will Binance see in the post-CZ era?
BlockBeats: CZ is no longer involved in Binance's operations. What do you think are the differences between Binance in the post-CZ era and before?
Catherine Chen: I personally miss the boss very much. But Binance is different from many other exchanges, we started internationalization very early, and also brought in a lot of non-OG talents to build the company. I myself have been with the company for three years, I decided to leave traditional finance in 2020 and joined Binance in 2021. In fact, the company's level of internationalization is already very good, and we are constantly introducing very experienced talents.
In the past three years:
First, the "core values" of the company are very clear, and have been continuously passed down from the early days to the present. This "core value" can be inherited and continued, and will not disappear due to the departure of the founder or the boss. And importantly, most of Binance's early co-founders are still in the company. This is something I find very admirable, because to be honest, they have already achieved financial freedom, but everyone is still here, still working for BNB HOLDER, because everyone feels that there is still a common goal to strive for and fight for. So even though the boss can no longer come back to lead the entire organization, under the leadership of the professional management team, the core values established at Binance will continue to be passed on.
Second, the company has actually been internationalized very early, and has introduced a lot of diverse talents from different professions. After I joined Binance, I was essentially a cross-industry transfer from traditional finance. The bosses appreciated my experience in traditional financial institutions, "Binance needs talents like you to lead Binance's entire VIP and institutional business." In fact, the company already had a very good talent echelon during that period.
So to be honest, there is not much change in Binance after CZ's departure. We will not stop our forward momentum because of CZ's departure.
BlockBeats: As the industry's leading exchange, what social responsibilities do you think Binance should take on?
Catherine Chen: I think the first thing we need to do is to "lead by example". That's why Binance is now taking the lead in compliance, and we're also taking the lead in other things, and we hope to set the real market gold standard.
At the same time, no matter what Binance does, we deeply understand that we are responsible to the vast number of users. So I believe everyone can see that whether Binance is launching new products or various activities, we are fully aware of Binance's social responsibility to users. And as a market-leading exchange, we actually need to be more careful and cautious, Binance's main focus now is how to make this industry have the next 50 years, 100 years.
Binance's ambition is not just to be the leader of this industry, although we already are. But we need to promote the entire industry to the next stage, and make the industry grow bigger. Binance will not stop innovating just because we have already grown big. We are always thinking about how to bring more investors into the crypto asset investment field and give them a smooth transition process.
For example, the launch of "Binance Wealth" on October 29th. The launch of "Binance Wealth" is to bridge the gap between cryptocurrencies and traditional finance. For a long time, the private wealth sector has lacked the traditional infrastructure to access cryptocurrencies. Binance Wealth will lower the entry barrier for more market participants to enter this new asset class. Against the market backdrop of "unlocking capital inflows is the key to making crypto assets mainstream", I believe that "Binance Wealth" has actively pushed the industry forward a step.
These are things that no one has done before, and we are always working hard to introduce the products and solutions that the industry and the market need in a timely manner.
BlockBeats: From the perspective of institutional and VIP trading, how do you see the future development of Bitcoin?
Catherine Chen: From the perspective of institutional clients, I think Bitcoin's current positioning is quite clear. Bitcoin, as the most widely recognized investment target in the entire crypto industry, is positioned as "digital gold" in the eyes of large institutional investors, as a target for risk diversification. From the perspective of institutional investors, I think they will continue to move in this direction.
Although everyone is currently working hard to give it more value applications, and there are many ecosystems and many capable people doing build, I still feel that it is "unfinished", and it is worth paying attention to. If it can find native applications on its own, of course that would be better. But from the perspective of institutional investors, there shouldn't be too much change. Bitcoin is usually used as a risk management tool to provide different performance returns for institutional investors' investment portfolios.
Bitcoin not only has no high correlation with many mainstream assets, but also has the characteristic of 24-hour trading. The 24-hour trading feature allows institutional investors to better coordinate their investment portfolios and manage their positions better when facing the traditional market weekend closures.
As for the future of Bitcoin, although I am not a Crypto OG, I am also a firm believer in the future of Bitcoin.
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