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CryptocurrencyBitcoin ETFs Could See $35B Inflows by Year-End – An Interview with...

Bitcoin ETFs Could See $35B Inflows by Year-End – An Interview with Bitget COO Vugar Usi Zade

In the latest installment of the GoCrypto interview series, Mike Ermolaev sits down with Vugar Usi Zade, the COO of Bitget, a leading global cryptocurrency exchange. Mike, known for his insightful interviews with notable figures in the cryptocurrency world and beyond, explores Vugar’s extensive experience and its impact on Bitget’s growth and innovation. This series, powered by GoMining, delves into the dynamic world of cryptocurrencies and blockchain technology. 

Vugar’s background with multinationals like SONY, Facebook, Danone, and Carlsberg provides a unique perspective. In this interview, Vugar discusses the impact of his diverse background, Bitget’s strategic expansion into emerging markets, AI-powered security enhancements, the significance of Bitcoin halving and ETFs, and his predictions for Bitcoin’s future trends and adoption, among other things. 

Leveraging Diverse Industry Experience at Bitget

When asked how his extensive experience across various industries influences his role at Bitget, Vugar Usi Zade explained that his journey into the crypto industry was distinct from many others. His venture into crypto began after exiting a successful Web2 startup and joining a venture capital firm to hedge his earnings and invest further. 

According to Vugar, his expertise helped him to navigate local intricacies Bitget faced, maximize outcomes, and manage diverse teams effectively. Having assumed the leadership role at Bitget, he has been instrumental in growing the company across all regions, particularly in Europe, LATAM, CIS, and MENA – compelling evidence of his global knowledge and business acumen. 

Usi Zade emphasized that his career in multinational organizations equipped him with practical skills to manage large, complex operations that transcend cultural boundaries and overcome time and place limitations, while fostering growth and innovation.

“My experience with truly global conglomerates and Fortune 500 companies has instilled in me a sense of discipline and structured thinking. More importantly, it has prepared me for a role where I can orchestrate the growth journey that propels Bitget toward true global leadership. Companies operate differently at various stages of their growth journey; a startup is managed differently than a mid-level company. Today, Bitget is a global company with 1,500 team members from 65 nations. Bitget operates 24/7 across all time zones and serves 25 million customers globally,” he shared. 

Global Expansion Focus

Bitget’s COO also shared insights into the company’s expansion efforts, particularly focusing on emerging markets such as Latin America, Southeast Asia, and Africa. Vugar mentioned that Bitget is investing more resources in these regions to support their growth.

“With the increasing popularity of cryptocurrencies, we realize the immense potential and growth opportunities in emerging markets such as Latin America, Southeast Asia, and Africa. Therefore, we are focusing and investing more in these thriving markets” he stated. 

He also highlighted Bitget’s proactive approach to compliance, while expanding globally:

“At Bitget, we recognize the importance of compliance in this dynamic industry. As the regulatory landscape for digital assets evolves globally, we have been actively and proactively communicating and discussing with various law enforcement agencies,” Usi Zade explained.  

Regulatory Compliance Efforts

Within the past two years, Bitget has gained AML licenses in Lithuania and Poland. Vugar Usi Zade revealed that more licensing projects are expected to be completed this year.

“Over the past two years, we have obtained two new AML registrations in Lithuania and Poland. Currently, more licensing projects are underway, and we expect to share more positive developments this year,” he elaborated. 

Usi Zade explained that through cross-departmental efforts, Bitget’s infrastructure and processes are continuously improving, with their goal being to comply with GDPR standards. 

“Last October, we implemented mandatory KYC procedures. Customers must pass KYC checks to conduct transactions or use other platform features. All on-chain activities are screened using tools like Chainalysis,” Vugar explained.

He also mentioned that Bitget’s compliance team is continuously expanding and actively handling communications and requests from various law enforcement agencies. Since last year, they have launched a public page detailing Bitget’s compliance efforts, enhancing transparency and actively communicating with the public. 

“Our efforts are not limited to internal measures; we also collaborate closely with institutions worldwide to combat various financial crimes,” he stressed. 

Short-Term Pain, Long-Term Gain from Stricter Regulations

Discussing the future landscape of the cryptocurrency industry, Vugar predicted that regulatory systems would become more refined but achieving consistency across regions would remain challenging. 

“Cryptocurrency companies will need to adopt different strategies in different regions, offer different products and services, and continuously adapt their localization strategies to accommodate new changes in each region,” he pointed out.

Usi Zade also indicated that legal debates over whether various cryptocurrencies are “securities” will persist: “If an ETH spot ETF starts trading smoothly and develops well, there might be some hope that the SEC will change its stance, giving the market the expectation that more mainstream cryptocurrency spot ETFs will emerge in the future.”

“New legislation and stricter regulations will bring short-term pain to the industry, but in the long run, continuously standardizing the market and improving compliance mechanisms will help new users recognize and participate in the cryptocurrency market. This will also gradually reduce the risk of various major incidents in the industry, leading to sustainable development,” he stated. 

“Bitget will embrace regulation, continuously making efforts in areas such as KYC, anti-money laundering, and timely adaptation to new regional laws. Under these regulations, Bitget aims to provide users with a safer environment and more reliable services,” he emphasized.

Educational Initiatives for Crypto Market Onboarding and Inclusion

Centralized exchanges play a crucial role in onboarding first-time users and educating the market. Usi Zade elaborated on the specific steps Bitget takes to ensure this process is smooth and educational for new users.

“In fact, we invest a lot of effort, time and resources into the adoption of cryptocurrencies. First of all, we are implementing a number of educational initiatives for the population to tell in detail about cryptocurrencies and the possibilities of blockchain. Thanks to our Blockchain4Youth program, thousands of students around the world have already been able to take free lectures on cryptocurrencies,” he explained. 

Usi Zade also mentioned Bitget Academy, where users can access detailed information about cryptocurrencies, blockchain technologies, and new solutions. In addition, he highlighted the launch of the #Blockchain4Her initiative, aimed at creating a female-friendly blockchain space by educating and embracing women in the industry. 

“I’m very proud of Bitget being one of the exchanges with the highest level of equity and inclusion in the crypto industry,”

Usi Zade said, adding that the exchange’s educational initiatives help various gender and age groups find their place in the industry.

AI-Powered KYC Verification

Bitget’s recent partnership with Sumsub to provide AI-powered deepfake detection for KYC verification was another key topic. 

“The latest AI-powered KYC verification technology by Sumsub boosts Bitget’s security protocols by ensuring robust user verification and fraud prevention, while also verifying users with government-issued IDs and confirming the true identity of individuals,” Vugar explained.

He described “Liveness” as a facial biometrics technology that confirms the user is a real person through real-time actions like blinking or moving, thus preventing deepfake scams.

“For users who may not have traditional identification documents, the Non-Doc Verification feature allows verification through alternative data points and methods, while maintaining the safety standards of Bitget and verifying user information against various databases like sanction lists and watchlists to ensure users are not involved in illegal activities,” Usi Zade noted.

He further clarified, “The database validation process will provide instant alerts if a user’s information matches any entries in these databases, allowing immediate action.”

The Impact of Spot BTC ETFs and Future Inflow Projections 

Usi Zade explained that the recently launched Spot BTC ETFs have attracted numerous investors seeking indirect, managed exposure to Bitcoin. “This remarkable success has encouraged other altcoin developers to apply for similar products,” he said. 

He observed that Bitcoin has recorded massive price increases, even breaking its all-time high following significant ETF inflows. Usi Zade highlighted, “BTC ETFs have recorded an average monthly net inflow of $2.98 billion. These inflows rose to $11.946 billion since the Bitcoin spot ETFs were approved on January 10. Based on the current rate of inflows, Bitcoin ETF products could record $35.78 billion in inflows by the end of 2024.”

Usi Zade noted that Bitget’s trading volume has significantly increased, particularly in spot trading volumes of BTC and ETH, in the last few months.

“However,” he cautioned, “the true extent of the impact will depend on the ETF adoption rate.”

The Performance and Benefits of Bitget’s BGB Token

The interview also touched on the performance of BGB, Bitget’s native exchange token, which reached its all-time high (ATH) of $1.48 on June 1, 2024. Vugar called BGB the “golden shovel” of this bull market and attributed its success to the strong demand for the token, as well as its benefits through Bitget’s Launchpad, Launchpool, and PoolX.

“Since the launch of Bitget Launchpad, projects from PandaFarm (BBO) to T2T2 have achieved maximum returns of over 25 times, creating remarkable wealth effects for ordinary users,” he noted.

Usi Zade pointed out that projects launched on Bitget’s Launchpool in the past six months have reached an impressive maximum ROI of 6.59%, with the highest annualized return at 329% and an overall average annualized return of 146%. 

He further described Bitget PoolX as a lightweight Launchpool characterized by low entry thresholds and quick returns, offering significant benefits for BGB holders. 

Bitcoin’s Long-Term Bullish Trend and Rising Institutional Adoption

Lastly, Usi Zade shared his insights on the future price trends of Bitcoin, predicting a long-term bullish trend. He explained that the approval of a Bitcoin ETF would facilitate more convenient investment for both institutional and retail investors, leading to a significant influx of funds.

“Given Bitcoin’s scarcity, with a total supply of 21 million, and its narrative as digital gold, in the long term, with more funds flowing in and market maturation, Bitcoin is expected to exhibit a steadily rising price trend,” he noted. 

However, he also cautioned: “Despite the broader market participation brought by the ETF approval, investors should still be aware of Bitcoin’s volatility and risks due to regulatory policies and susceptibility to macroeconomic factors, regulatory changes, and market sentiment.”

Discussing the adoption rate, Usi Zade mentioned that although Bitcoin is primarily seen as a store of value, its adoption rate will steadily increase as crypto assets gain recognition by mainstream capital markets. “Its use in payments and transactions will also grow, especially in countries with high inflation or unstable economic environments,” he explained. 

“The approval of the ETF also makes it easier for ordinary investors to buy and hold Bitcoin without worrying about issues like crypto wallets and private key management. This will gradually increase Bitcoin’s share among the general public’s investments,” Vugar added.

Regarding Bitcoin’s role evolution in the crypto market, Usi Zade highlighted that as the number of institutional and ordinary investors grows, Bitcoin’s position as digital gold will further strengthen.

“As time progresses and the number of institutional and ordinary investors increases, Bitcoin’s status as digital gold will further solidify, becoming the preferred asset for value storage, especially as a defensive asset in investment portfolios,” he said. 

He also predicted that the approval of a Bitcoin spot ETF would further promote Bitcoin’s integration with traditional financial markets, making it a part of financial products such as insurance products.

Furthermore, Usi Zade noted that in the past, most DeFi ecosystem protocols were centered around Ethereum assets. However, in this Bitcoin-led bull market, BTC and native BTC network assets are expected to gain wider adoption in the DeFi field. 

“Overall, the approval of a Bitcoin spot ETF signifies that crypto assets are gradually being recognized by mainstream capital markets, which will benefit its price and adoption rate in the long run. With the increase in institutional and ordinary investors, Bitcoin’s status as “digital gold” will further consolidate, potentially merging with traditional financial markets. Over the next few years, Bitcoin will become increasingly important as its ecosystem continues to build and develop,” he concluded. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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