FXCM Managing Director: Bitcoin or Forex? Customers Just Want to Trade What is Moving
Exclusive Interview: Michael Kamerman, Managing Director, FXCM
FXCM is a leading provider of online foreign exchange (FX) trading, CFD trading, spread betting and related services. Founded in 1999, the company's stated mission is to provide global traders with access to the world.
Michael Kamerman is the Managing Director of FXCM and has been with the company since 2005. As such, he has witnessed the company’s transformation from a primarily retail FX broker to a multi-asset trading provider with both retail and institutional clients. Michael describes his current role as one where he represents the global multi-asset leader on new product developments and strategic partnerships.
In this exclusive interview with Blockchain.News, Michael discusses trading trends during times of macroeconomic uncertainty, Bitcoin’s contentious investment value and status and FXCM’s future roadmap.
Investing during Economic Uncertainty
Prior to the recent stock market crash which sent equities plummeting, traders hardly had a trouble-free environment to operate within. Over the last year, market participants have also had to contend with a China-US trade war, Brexit uncertainty and Coronavirus disruption, making investment anything but straightforward.
On his observations regarding traders’ movements over the last year, Michael said, “At FXCM, we have observed that our customers appreciate having the choice to trade different products, including forex, cryptocurrencies, equities, precious metals and more.”
He highlighted, “I would not say our customers are shifting their investment sentiments, but instead remain opportunistic. If forex is moving, they trade forex. If Bitcoin is moving, BTC/USD is all the rage. Recent volatility has benefitted our cryptocurrency product line in that our number of active crypto traders is up. Data does not show our customers choosing crypto over forex or vice versa. Customers just want to trade what is moving.”
Bitcoin not a Safe Haven…Yet
Bitcoin’s status as a safe-haven asset has been under intense scrutiny as the BTC price continues to fall amidst a series of crisis events in 2020. These have continued to create the ideal environment for the digital commodity to theoretically thrive. Beginning with the Iranian - US conflict in early Jan, the coronavirus outbreak triggering a cut in interest rates by the Federal Reserve, and now the plummeting oil price following a disagreement in Vienna between Russia and the OPEC nations, by now surely Bitcoin's price should be climbing due to its hypothetical ability to act as a non-correlating market hedge asset?
According to Michael, there are two parts to the question of Bitcoin’s potential to be an alternate store of value to gold. “First, is Bitcoin a “safe haven?” My answer is, no, not yet. It has the characteristics of what would be a “safe haven” asset but if you look at the way it moves on a chart, it is not a “safe haven” instrument.” He added, “I think as Bitcoin is more widely adopted, investors and traders will wake up to its “safe haven-like” qualities – but it is too early now.”
The Managing Director does believe, however, that Bitcoin serves a purpose during volatile financial markets. Michael explained, “It is generally an uncorrelated asset class, meaning if all of your “mainstream” investments are moving in one “risk-on” or “risk-off” direction, Bitcoin probably will not follow that same trend. Cryptos generally move off their own underlying fundamentals. It is not to say Bitcoin and cryptocurrencies are not volatile – they are. However, if you are seeking diversification or alternative trading opportunities, they exist with cryptocurrencies.”
CFDs and Crypto
In the United Kingdom, a CFD, or contract-for-difference, is a regulated financial product that allows you to speculate on the price of an underlying asset. Therefore, a CFD on Bitcoin allows you to speculate on whether or not you believe the price of Bitcoin will rise or fall.
Michael stated, “One of the key advantages of trading via CFDs is that investors do not need to worry about storing your physical crypto in a “hot wallet” which is vulnerable to an external hack.” He added, “When retail clients trade CFDs with FCA-regulated brokers, their funds are held in segregated bank accounts and all trading is subject to pricing and execution standards governed by strict regulation. This means that customers can focus purely on their trading strategy.”
FXCM 2020 Roadmap
The FXCM product team is constantly reviewing customer feedback and market trends to offer its customers new and exciting instruments to trade. Michael shared that there would be some improvements to previously released products and teased us with news of some yet to be announced development.
Michael said, “In 2019, we released our proprietary, “CryptoMajor” cryptocurrency basket that has proven popular with customers. It simplifies the decision of which crypto to buy or sell and instead allows the trader to buy or sell the crypto market in general. In 2020, we have launched EOS and Stellar (XLM/USD). We have big plans for the rest of the year and look forward to making more announcements soon.”
Looking to the future, Michael reflected on his journey, “Between my four years in San Francisco and now five years in London, I have had first-hand experience in seeing the fintech universe grow. The challenge both then and now is translating that growth into something meaningful for our company and our customers. We think we are up for the challenge and look forward to delivering on it throughout 2020.”