:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/H2KLMJDQQBETMGPXECR4A2XPIM.jpg "Cryptocurrencies are suffering a 'winter' as values drop. Source: Bloomberg")
Bloomberg Línea — Bitso’s CEO Daniel Vogel is confident that the downward trend of cryptocurrencies is cyclical and momentary. The Mexican entrepreneur recalls that a similar situation occurred in 2017, but it did not prevent the growth of the crypto exchange platform, currently valued at $2.2 billion.
Despite the so-called ‘crypto winter’, Vogel assures that users’ interest in the crypto world continues, and due to demand has decided to launch a debit card in alliance with Mastercard. According to Bitso executives, who did not give an exact date for the card’s launch, there is already a long waiting list of users on the platform.
“We have seen certain patterns from users, on paydays money comes into Bitso and is exchanged for digital dollars and then we see them convert them back to pesos to make their payments, we are excited to see a latent demand,” said Vogel in a meeting with media.
The Bitso card will offer cashback with every purchase users make, and will not charge an annual fee. In addition, it can be used worldwide, although it will be launched first in Mexico.
Cryptocurrency exchange platform Taurus has already launched a debit card in Mexico in alliance with VISA. And Argentine startup Belo has also launched a card, and is seeking to position itself in Mexico also.
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5% of Mexico’s remittances pass through Bitso
Bárbara Briseño, CEO of Bitso Mexico, highlighted that crypto use cases are expanding, and range “from saving in bitcoin or digital dollars, which helps users to protect themselves from exchange rate fluctuations, to sending money to relatives in another country. There is a lot of appetite among users”.
According to Briseño, one of the main use cases is sending remittances. And, according to Vogel’s data, 5% of remittances sent to Mexico are transacted in crypto assets through Bitso. This percentage is thanks to the combination of individual users and remittance companies, which automate the process and reduce costs when using the platform.
In the first half of this year, Bitso processed $1 billion in remittances, matching the transaction volume of all of 2021 and quadrupling that of the same period of 2021.
The company, which has five million users globally, will double the volume of remittances it processes through its cryptocurrency platform by the end of 2022, and expects to process more than $4 billion by 2023.
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‘Crypto winter’ will not last forever
Brian Armstrong, CEO of Coinbase, predicted earlier this month that the bear market in the crypto world will last another 12 to 18 months.
For his part, Vogel says it’s hard to estimate how long the crypto winter will last. “Crypto values dropped a lot, but then they also went up a lot, the ethereum coin was up almost 70% and then it went down, the truth is that there is significant volatility there,” he said when asked how he saw the future of the crypto industry.
The cryptoassets crisis can be an opportunity, Vogel says, adding that such low values are an opportunity to enter the crypto world and make profits when they return. This volatility is normal, he said.
“I measure a lot of the success of this industry based on the human capital that is invested in this ecosystem, and one of the metrics we really like to track is the number of engineers that are working on growing the crypto economy, and this goes up on price rises but doesn’t go down when the price goes down. I like to track that rather than price as an indication of industry growth.”
Bitso, which also operates in Brazil and Colombia, has not been oblivious to the crisis plaguing the crypto world or the complicated situation for startups, and in May the company laid off around 100 people in Mexico.
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“Our decisions about the people who work in our company are made based on our long-term business strategy and to support our customers and our strategy as a company. We work in a fast-paced industry that requires us to constantly rethink the skills we need in order to be able to move even faster to where our customers need us to be,” the company stated at the time.
“Obviously it’s difficult when you’re growing your company a lot, with the inertia, and realizing that the world is changing and you have to adjust and the decisions you make are difficult,” Vogel said, referring to the downsizing.
Also, in early August, the cryptocurrency unicorn cut bonuses for investing in bitcoin from 5% to 2%, while those for US-dollar stablecoins dropped from 15% to 8%.
In the face of this complicated situation, Vogel said Bitso has had a much more product-focused and use-case driven approach.
“This is the third time at Bitso that we have seen a drop in crypto values, and every time I look back on those moments I do it with a lot of happiness because they gave me focus,” Vogel says, adding that “a lot of the incredible things that are built in the crypto world are built in these bearish periods, where you have to have more focus and think longer term, and you have to accommodate your propositions in a more orderly fashion.”
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