- Kraken is a cryptocurrency exchange designed to encourage people with all levels of experience to buy and sell cryptocurrencies, including bitcoin (XBT), Ethereum (ETH) and EOS. Users can exchange their crypto for fiat or for other types of digital currency.
- Cryptocurrency has evolved since its chaotic beginnings, and is now seen by many as a valuable asset in a diverse investment portfolio.
- Founded in 2011, Kraken is considered one of the most secure cryptocurrency exchanges.
Cryptocurrency is slowly going mainstream, and what it’s losing in mystique, it’s making up for in influence.
Not long ago, cryptocurrency (better known as crypto) was only part of small niche community. Now it’s being held, invested and traded by people who recognize its potential to bring a healthy diversity to their investment portfolios.
This increased scrutiny has moved crypto trading from shady corners of the internet to carefully monitored exchanges like Kraken. The ‘adult in the crypto-trading room’, Kraken was founded in in crypto’s early days (2011) by CEO Jesse Powell. Unlike the gatekeepers, Kraken wants to make digital currencies accessible for all. In addition to functioning as an exchange, Kraken offers resources to educate newcomers and more experienced crypto-dabblers about how to use the market to get the most from their investments.
“What our team has done quite successfully is say it’s a new marketplace and there are lots of different levels of sophistication, education and interest,” Chief Commercial Officer Bobby Zagotta explains. “Let’s make sure we can serve all of them, and then we’ll evolve.”
In the notoriously tough-to-regulate world of crypto, Kraken is also very strict about only trading currencies that pass their evaluations. “We offer 30 cryptocurrencies that are very stringently vetted, to make sure we’re offering investment and trading opportunities that make sense and are sustainable,” Bobby explains.
Once you’ve made an investment, they keep it safe. “Kraken is consistently rated the number one most secure exchange globally, so security is something we take very seriously,” Bobby says.
Kraken is being taken seriously too. In 2019, they raised $13.5 million based on a $4 billion valuation. Bobby joined the podcast to talk about how the crypto market looks today, its value in every portfolio and how Kraken is helping more people join the game.
Interview Highlights — Bobby Zagotta from Kraken
This isn’t yesterday’s crypto market
This is a really interesting moment in terms of the cryptocurrency marketplace. There’s a convergence of some factors that people are really taking note of.
First, this didn’t start yesterday. It was in 2011 or 2012 when it started to become a marketplace. Today, one of the biggest differences is there’s real infrastructure. There are real regulations, and there are companies such as Kraken that offer a secure way to participate.
Then there are some market-driven factors. A lot of people who have money invested in the stock market are looking for asset classes that are not completely correlated. There’s gold and some other things, but those are sometimes more correlated than not. With cryptocurrency there’s an opportunity that’s new and it’s not correlated at all, which gives you a different kind of opportunity from a portfolio perspective.
The third piece of the puzzle is, if you look at the cycles of crypto, and Bitcoin in particular, there are some characteristics in the market that lead people to believe that 2020 could see some volatility and price increases for Bitcoin.
Crypto can withstand storms that sink traditional markets
Some obvious things that create dynamics in the traditional marketplace create different dynamics in the crypto marketplace.
For instance, global disruption generally creates a depression in the equities marketplace, but it generally creates an increase in investment and pricing in the crypto marketplace. People are more likely to invest in cryptocurrency markets when other markets are sliding.
The future of cryptocurrency is still being written. But I think most people acknowledge that it has a different kind of safety to it than traditional equities or commodities or even gold, because it’s independent of the traditional infrastructure.
Kraken is bringing crypto to everyone
Kraken has a $4 billion market cap, at least based on our recent fundraising. We have 800-plus employees in 200 countries around the globe. We offer 30 cryptocurrencies that are very stringently vetted to make sure that we’re offering investment and trading opportunities that make sense and are sustainable.
What I think Kraken has done well is building a platform that is safe and secure for different kinds of interested parties. They may just want to get educated, or they may want to invest and hold, trade or make forays into global marketplaces via fiat currencies.
One of the decisions that our CEO Jesse Powell and his team made early on was making sure that what we’re building can serve multiple customers. Some entrepreneurs will say pick your niche — your one segment — and focus on that. What our team has done quite successfully is say no, it’s a new marketplace and there are lots of different levels of sophistication, education and interest. Let’s make sure we can serve all of them, and then we’ll evolve along with the marketplace.
What the world needs to know about crypto
We’re pretty advantaged here in the US, given the trust we have in our institutions: but that doesn’t exist everywhere in the world. There are some parts of the world where not only can they not trust their government, they can’t trust their business community. There’s a million percent inflation, so they can’t trust their currency. They’re sitting there watching their life-savings evaporate. Part of the narrative should be that this concept creates a level of independence for people from all walks of life, from all geographies. It can play an incredibly important role in people’s abilities to have great lives.
The second thing is, I would like people to realize that there is a safe and secure way to participate. In fact, the risk profile of cryptocurrencies might be better than some of the traditional institutions that we take for granted, because it’s purely independent. You are in charge of that segment of your wealth. You’re not dependent on a bank, a government, a government-backed security or currency or anyone else. It’s you and the technology. That creates a level of comfort, particularly for upcoming generations who have a different view of traditional institutions than we did and our parents did.
If you want in on crypto, read this first
The first thing is to educate yourself. There is a great deal of information out there, and there’s also a lot of noise. Come to our website, we have a lot of resources available. We also have live customer support for people who want more hands-on help as they get into it. Even if you decide not to participate at this moment, it’s going to affect your life at some point, and it would be good to understand it.
The second thing I would say is, understand security. You must take your responsibility with security seriously, and not just if you’re in crypto. The level of security and how culturally imbedded security is for the employees at Kraken was eye-opening for me. I thought I was joining the CIA when I first arrived, for all the right reasons. It caused me to evaluate what I do personally and completely redo it. Make sure you partner with a cryptocurrency firm or exchange such as Kraken that gets it. Kraken is consistently rated the number one most secure exchange globally, so it’s something we take very seriously.
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