Pavel Zavadskii, Biqutex: “Investing in Crypto ETFs Isn’t a Good Idea”

The cryptocurrency market has experienced highs and lows over the past few years.

Each international market has different realities regarding the situation that the crypto industry is experiencing.

Today we speak about different topics related to the cryptocurrency industry internationally, with one of the leading figures in the international cryptocurrency market, Pavel Zavadskii, Founder of Biqutex exchange.

What is your opinion on the current crypto market? Is it a good time to buy cryptocurrencies?

Any time is good to buy cryptocurrencies, primarily if you have never owned them and are just considering the opportunity. The sooner you try, understand, and experience the advantages of decentralized crypto assets over centralized banks, the better!

Now is the right time for those who already own crypto and plan to buy more. Inflation in the world’s leading economies is declining, and we are likely at the very beginning of a cycle of central bank rate cuts, which will positively impact cryptocurrency prices.

Can ETFs be considered as good investment vehicles? Why?

For me, no. When investing in ETFs, you do not directly own the assets you purchase. The philosophy behind cryptocurrencies is decentralization, which lets you own the keys to your wallet and, therefore, coins.

With ETFs, the actual coins are held by a centralized custodian. This means you face the risk of the institution’s bankruptcy and the risk of your assets being frozen by the government or a court order. Additionally, you pay a management fee to the fund issuer. I don’t see any advantage in investing in crypto through ETFs other than self-custody.

In your opinion, how do you see the evolution of the cryptocurrency market in Europe?

MiCA has already come into effect in the EU. It is a well-developed, comprehensive regulation for crypto companies. Some market participants may find it excessive and restrictive, but at least businesses have some rules and frameworks for legal work in the region, which is good.

Many large exchanges and crypto payment companies have already obtained licenses in the EU, so the market in this region is developing well. We at Biqutex are also keeping a close eye on this market.

Are regulations important for the crypto industry? Why? Are you worried about global regulatory concerns? How will Biqutex adapt to it?

Unless they explicitly prohibit using cryptocurrencies, any regulatory innovation or rules are steps toward global acceptance of our industry. Even countries that have banned cryptocurrencies will likely realize their mistake and legalize them in the future.

Rejecting such innovative technologies reduces the economy’s attractiveness to investors, making the country fall behind. That is why Biqutex chose the United Arab Emirates as its base; the authorities there support the development of cryptocurrency startups through an advanced regulatory framework.

Is it better to buy stablecoins or Bitcoin? Why?

Bitcoin. It makes no sense just to buy and hold stablecoins. While they are a convenient means of payment, it’s essential to understand that stablecoin issuers use fiat dollars received from token sales to buy US Treasury bonds. At current Fed rates, the annual yield on treasuries is 4.3-4.5%. This means that if you hold 100,000 USDT in your wallet for a year, the Tether company will earn about $4,300-$4,500 in interest income by investing its reserves in bonds.

Meanwhile, you will still own exactly 100,000 USDT after a year, two years, and so on. Stablecoin issuers do not share their income with token holders. However, new instruments pegged 1:1 to the U.S. dollar, like USDe by Ethena, have emerged and allow you to earn yield. By the way, we are one of the first exchanges to consider accepting such stablecoins as deposits for trading on our platform.

What is Biqutex? How was it created?

Biqutex is the first fully non-custodial derivatives launchpad with its in-house exchange. Currently, the project is in the closed beta testing stage. Our main goal is to provide a platform for honest launches of perpetual futures on new “startup” tokens under a subscription model, accessible to any team without significant capital. There are no such opportunities on the market.

Directly listing a token on the spot DEX is not a problem, but launching futures requires agreements with a limited number of major exchanges and meeting KPIs on token capitalization and trading volume. We have only one requirement for founders before listing their tokens, in addition to paying the basic subscription fee to cover the costs of Biqutex infrastructure — to be an honest and legitimate project.

Where will Biqutex be operating from? Will it have a HQ or a base?

At Biqutex, we are currently focused on preparing for the launch of trading on the exchange and the first listings in the coming months. Our core team is based in Dubai, UAE, where local authorities have created an ideal environment for innovative cryptocurrency companies to thrive.

While we position ourselves as a global exchange that operates seamlessly without being tied to a specific jurisdiction, we also monitor regulatory developments in various crypto-friendly regions to stay ahead and be ready for future opportunities.

Any particular areas or regions you’re looking to capture and start with?

We plan to build our brand around a community of supporters who appreciate the principles and standards that guide the Biqutex team. These include full transparency, a focus on safe custody of assets “off-exchange” in a custodian, and protecting our traders from rug pulls, which have become very common on DEXs due to the lack of due diligence procedures before listings.

It doesn’t matter what country they live in. We do not limit ourselves to any particular region except for regulatory requirements in certain jurisdictions where we cannot provide crypto derivatives trading services. Please refer to our user agreement on our website for a full list of prohibited countries and regions.