The Future of Cryptocurrency Trading: Insights from Wintermute CEO Evgeny Gaevoy

Evgeny Gaevoy, a veteran of traditional finance, transitioned to the blockchain space in 2016, driven by the potential for disintermediation and the inefficiencies of legacy financial systems. With a background in market making and prop trading, he launched Wintermute in 2017, an algorithmic trading firm tailored to the digital asset era. Today, Wintermute is one of the largest algorithmic trading and liquidity providers in crypto, processing over $5 billion in daily trading volume and providing deep liquidity to over 50 trading venues across centralized and decentralized exchanges. In this interview, Gaevoy discusses the differences between Asian and Western crypto markets, the role of AI in trading and market making, and Wintermute's approach to the growing fragmentation of liquidity across multiple blockchains. Gaevoy's career in traditional finance began with a focus on market making and prop trading. However, by 2016, he recognized the potential of blockchain to disrupt traditional financial systems. He started exploring the blockchain space, and by 2017, he had decided to launch Wintermute. Gaevoy's experience in building Optiver's European ETF business, one of the largest in the EU, laid the foundation for Wintermute's success. When asked about the differences between Asian and Western crypto markets, Gaevoy noted that regulation is primarily driven by the U.S., even in Asia. He also highlighted that China's institutional and corporate sectors are still not allowed to engage with crypto, which limits the country's potential for institutional flows. Gaevoy identified Japan, South Korea, and Hong Kong as key markets in Asia, each with unique characteristics. Japan is becoming more attractive due to its improved tax policies for crypto, while South Korea has a massive retail market, but foreign market makers are restricted from integrating with local exchanges. Hong Kong plays a unique role as a pilot program for China, establishing regulated markets and institutional frameworks that could serve as a testing ground for China's future engagement with crypto. Gaevoy also discussed the role of AI in trading and market making, stating that AI is already widely used in trading and has been for some time. However, he believes that AI will not completely replace human traders in the next 5-10 years, as there are still limitations to automation, particularly in highly unpredictable and volatile markets like crypto. Regarding the fragmentation of liquidity across different blockchains, Gaevoy views it as an opportunity rather than a challenge. Wintermute's strategy is to facilitate and promote diversity in blockchains, centralized exchanges, and decentralized exchanges. The company is connected to all major centralized exchanges, a huge range of OTC counterparties, and dozens of DeFi ecosystems, which provides a competitive advantage. Gaevoy will be speaking at Consensus Hong Kong, where he plans to discuss market structure and the role of market makers in crypto, dispelling common misconceptions about the industry.