As the industry waits with bated breath for the onset of a new bull run, the Johannesburg-based VALR exchange is poised to broaden its horizons.
Africa’s leading crypto exchange by trade volume, VALR attracted over $50 million in equity investments from a slew of high-profile VCs last year and recently appointed experienced executive Ben Caselin as its new CMO. With 2024 almost upon us, Caselin is excited not only about the exchange’s proposed international expansion but also what the future holds for the industry more generally.
A Brightening Macro Picture
Previously Vice President and Chief Strategy Officer at trading platform MaskEX, and before that VP at Atom Asset Exchange (AAX), Caselin has first-hand experience of bear market dejection and bull cycle euphoria. There is a sense, however, that the industry’s continued courtship of institutional players is creating ideal conditions for the next upsurge.
“When we look at the overall macro picture, from political developments in Latin America and the US for that matter, to the of BlackRock’s Bitcoin Spot ETF, regulatory developments in places like the UAE, Hong Kong and Europe, or even just the coming , there is plenty reason for optimism,” says Caselin.
As well as being familiar with the market’s ebbs and flows over a multi-year period, Caselin has encountered different regulatory frameworks and user demographics, having worked in Hong Kong and Dubai. So, what brought him to South Africa and VALR?
“Given everything that’s happened over the past few years, especially around the exchange business, I think we need to be relentless in our search for quality and integrity. In that regard, VALR was the obvious choice. Now in its sixth year, its commitment to integrity and security has stood the test of time and it has established itself as the foremost exchange in South Africa.. It’s also the biggest crypto exchange by trade volume on the continent as a whole.”
Caselin emphasizes another draw that saw him pack his bags and decamp from Dubai to Johannesburg: “VALR is truly values-driven, perhaps uniquely so in this line of business, and I believe that’s the key ingredient which not only secures growth but also solidifies that growth over the long-term as the industry continues to raise its standards.”
A Plan for International Expansion
There’s no denying that 2023 has been a big year for VALR. A few months ago, the platform inked a partnership with Visa, enabling users to leverage the payment network to make and receive payments. It also rolled out perpetual futures contracts paired with the South African Rand (ZAR), meaning traders can now participate in spot, margin and futures trading using a single collateral source.
“It’s good to remember that most people in the world do not live in a US dollar-denominated universe and come into crypto from the basis of their own fiat currency,” states Caselin. “To be able to hedge against that position, to capitalize on the volatility in that pair, or to be able to take advantage of new market inefficiencies, is certainly valuable.”
Clearly VALR is not content with being a big player in Africa: it has set its sights on bringing its institutional-grade features around governance, shared accounts and competitive rate limits to a global audience. “Although we already serve over 900 corporate and professional traders, as well over half a million retail traders, VALR is actively preparing for international expansion,” confirms the exchange’s new CMO.
In addition to receiving an initial approval from VARA, Dubai’s Virtual Assets Regulatory Authority, the company has also been approved to offer services in Europe and is actively building out the infrastructure to enable more fiat on and off-ramps. “My appointment is part of this larger initiative to take the exchange global.”
Timing is everything, and VALR’s decision to expand its professional and retail user base is, on the face of it, opportune: regulatory clarity is improving and more institutional OTC marketplaces, clearinghouses and custodians backed by tradfi bellwethers are entering web3. Recently, SkyBridge Capital founder Anthony Scaramucci suggested the much-mooted Bitcoin spot ETF approvals would attract a tsunami of interest on Wall Street, with money managers likely to allocate more of their portfolios to BTC.
“Participation by institutional investors and corporations is obviously vital to the growth of this asset class and industry, but it does not necessarily serve the underlying mission of bitcoin and DeFi,” notes Caselin.
“For example, the potential approval of BlackRock’s Bitcoin spot ETF is widely celebrated as a victory for the space, but apart from the exposure it grants to price, holding shares does not empower investors with the ability to engage in permissionless transactions or self-custody. This is something we need to be mindful of. That said, increased participation from institutions puts healthy pressure on both exchange operators and regulators to optimize for market integrity and consumer protection. That’s certainly a positive development.”
Bitcoin Leads the Way
At the time of writing, no fewer than 13 Bitcoin spot ETFs are striving for approval with many analysts predicting the world’s leading cryptocurrency will mature into a less volatile asset following the arrival of these financial instruments. Caselin, though, prefers to look at the broader picture.
“Before anything, let us recall that Bitcoin was created to offer an alternative to the current financial system which overly relies on intermediaries, and in which incumbents have outsized control over the system at detriment to financial inclusion, autonomy and freedom. Anyone who wishes to see Bitcoin and DeFi succeed is fundamentally aligned with the goal of creating a system that suits the need of our digital, globalized age and fosters participation.”
The benefits of bitcoin, of course, are perhaps most appreciated in emerging markets suffering from hyperinflation, corrupt governance and financial surveillance. Caselin says VALR intends to offer valuable services in a wider variety of these emerging markets, though its foray onto the global stage will firstly be of “a more general nature.”
Ultimately, the test for Caselin and the rest of the VALR leadership team will be whether they can use their impressive success in Africa as a blueprint for global growth. While the trading landscape is already fiercely competitive, the wave of users that arrive during a bull market means there will be plenty of opportunities to capitalize. 2024 is already shaping up to be a fascinating year in crypto.