Summary
- For crypto assets to enter traditional finance, they need to strengthen 24/7 risk management including market and credit risk management.
- Counterparty risk is identified as a major challenge in the crypto asset market, explaining it as a factor that increases the possibility of loss during arbitrage.
- To gain investor trust, securing data availability and liquidity transparency is crucial.
As discussions continue about the integration of crypto assets (cryptocurrency) with traditional finance, experts advise that crypto assets need to establish 24/7 risk management measures to successfully enter traditional finance.
According to CoinDesk on the 19th, Gautam Sharma, CEO of Brevan Howard, participated in the 'Wall Street's Perspective on Crypto Assets' session and stated that "while there are companies in traditional finance that have entered the crypto asset sector," he emphasized that "24/7 risk management, including market and credit risks, is necessary."
Counterparty risk was also identified as a challenge that the crypto asset market needs to address. Counterparty risk refers to the potential loss that can occur when a trading counterparty fails to fulfill their settlement obligations. Fabio Frontini, founder of Abraxas Capital, explained that "counterparty risk is the most important factor when conducting arbitrage," adding that "especially in the perpetual futures market unique to crypto assets, users can lose their margin due to stop-loss orders."
Market liquidity was also highlighted as an area for improvement. Mike Kunel, CEO of Flow Traders, emphasized that "to gain investor trust, transparency is needed to move liquidity without dispersion along with data availability."
Uk Jin
wook9629@bloomingbit.ioH3LLO, World! I am Uk Jin.
