Edward W. Mandel
Oct 29, 2018

The BQT.IO team is working around the clock, around the globe, to create the best decentralized cryptocurrency exchange you could hope for: with an ideal mix of crypto and fiat pairs, true peer-to-peer capability, easy-to-use tools, a social platform and all the accoutrements needed to entice sophisticated hedge traders.

Luca Cotta, #1 ICOBENCH Expert. ETHLend Co-Founder and BQT Strategic Advisor recently featured BQT on it’s interview as a disruptive project.

What we’re building is so amazing that we don’t need to oversell it. So I can be as totally honest with you about what it can’t do as about what it can.

And here’s the one, critical thing it can’t do: create liquidity for the hundreds — if not thousands at this point — of tokens floating around cypherspace. We are under no illusions. Even our own BQTX token will be traded only among people who value it, and only for what those people collectively decide it’s worth.

And we wouldn’t have it any other way. We don’t create liquidity. You do.

Liquid measures

You’re no doubt familiar with the “When Binance?” meme? It’s crypto shorthand for, “When is your token going to be traded on this exchange so that it might actually be worth something?”

It’s a thing. But maybe it’s an overblown thing.

Redbubble asks the eternal question

Yes, you can make money speculating on the timing of a token attaining a Binance listing. But that’s a technical rather than a fundamental play.

To back that up, I’ll refer you to an analysis Paddy Baker did in July for Crypto Briefing.

“Investors can expect an 80% increase in a cryptocurrency’s valuation in the immediate aftermath of being listed on Binance,” Baker reports. Even so, “Out of the 13 added ... in June and July, 12 have reverted back to pre-listing price levels.”

The bump, he says, lasts only a day or two. Baker’s analysis confirms one by Max Ambrose, which might actually be the more rigorous and authoritative. While Baker is easier to understand in text format, Ambrose draws some pictures that are pretty hard to refute:

Augur (REP)
Bitecoin (BCN), May 8
Typical trading patterns around Binance listings. Source: Astral Crypto.

And, if we’re to be completely academically honest, there’s not enough evidence here to conclude that the bump was 100% caused by the Binance listing. I mean, it appears pretty obvious but here’s another thing to consider: What if the people behind Binance are actually doing their job and curating assets before placing them on their exchange? Then it could be presumed that the listing is coincident with, or even lagging, a broader perception that these tokens are worth something independent of where you can buy or sell them.

The market makes market makers

The real difference between a true cryptocurrency and a shitcoin isn’t the exchange listing, it’s the market maker. CryptalDash offers a great primer here on Medium about how market makers comprise a critical aspect of the crypto market — or any market. They speed up order fulfillment, stabilize spreads and of course create “avenues for market liquidity” — again, not liquidity itself.

So who are these market makers?

Considering the pseudonymous nature of many of the major crypto players, there’s no authoritative list. But there are a handful that are actually looking to promote their businesses publicly.

  • Akuna Capital is a quant shop that is expanding into the crypto space from its origins as a derivatives market maker.
  • Coin Flow distinguishes between two flavors of market making: designated and undesignated. Designated market makers are sponsored by those offering the tokens with the stated goal of providing liquidity. Undesignated market makers just live off the spread, so they congeal around offerings that are already fairly liquid.
  • GSR grew up with Ripple and appears to be the market maker with the longest teunure in the crypto space.
  • Pulsar Trading Capital concentrates in trading bitcoin for alt-coins. Considering it’s based in Hong Kong, I’m guessing that they’re most interested in stablecoins, which enable mainland Chinese to skirt their government’s capital flow restrictions as I reported here.
  • Wintermute Trading is perhaps unique among market makers in that it offers services to ICOs and listed crypto projects as well as to exchanges.

There are no doubt scores of others, but maybe they don’t want to be mentioned here.

Going with the flow

But even with everything BQT.IO — or any exchange, centralized or decentralized — can do, it’s not enough to turn a utility token without any real utility into a trade-worthy cryptocurrency. At the risk of repeating myself, let me just call back to something I first shared with you last month which I continue to emphasize:

“We can facilitate, we can make it easy to trade, we can provide support. But no exchange can by itself, not even Binance, can create liquidity.”

And it is so important that we, collectively, as the vanguard of a new, better way to transfer value, get this right. Much of the value proposition of distributed ledger technology is that it renders liquid assets that were once considered illiquid. We enable the rapid disbursement of jewels, collectibles and works of art, and even their fractional ownership. Tokenization is the key to unlocking potentially billions of dollars in locked-up value, according to Cameron McLain’s post on Master the Crypto.

It would be a travesty if we can’t prove that we can’t unlock our own value. With BQTX, we’re putting our own effort, funding and above all reputation on the line. If you’re reading this, you probably have just as much to gain or lose. Personally, I look forward to celebrating with you once we prove the naysayers wrong and can trade scores of cryptocurrencies as quickly and easily as moving cash from savings to checking.

Edward is an Ernst and Young Entrepreneur of the Year Finalist, Blockchain Enthusiast and visionary behind many successful organizations. An avid entrepreneur, Edward has a knack for designing distinctive business models complemented with superior technology to deliver unparalleled service and profitability. Edward also has been advising and consulting for various successful Blockchain technology and ICO projects and recently launched his own BQT.IO P2P exchange helping traders connect with each other to leverage their crypto assets.

BQT.IO has been in development since March 2017 and its ICO launched September 18. The information can be found online at BQT.IO, on Telegram @BQTCommunity and on Twitter as @BQTico.