Over the past three years, Hodl has grown significantly as a brand and correspondingly, our team has also considerably expanded. The team of Hodl consists of 25+ team members with all different backgrounds and experiences, all story worthy, however, we want to highlight a few key members who made Hodl as we know Hodl today. The second individual in this series is one of our founders and our current Chief Operation Officer: Nick Friedrich.
Nick has been active in the cryptocurrency scene for quite some time and has seen the market grow from a small digital currency to a whole new asset class. As Hodl, we are lucky to have him on our team and the insights and experience he provides.
Before entering the cryptocurrency market, Nick traded in various currencies as a forex trader. As Nick traded alongside his regular job, he found it increasingly challenging to keep up with these markets that are heavily influenced by economic calendars. In 2012, Nick discovered the cryptocurrency market which was in its very early stages. At the time, the market was not affected by the economic calendar or almost any macroeconomic factor, making it perfect for trading.
At first, Nick’s biggest driver towards the market was the profitability of trading as the volatility provided hundreds of trading possibilities a day. However, as time progressed, Nick began to learn more about the technology, value proposition and the philosophy behind cryptocurrency. Throughout the years, Nick has become a true advocate and believer of the market.
In its early stages, cryptocurrency and blockchain technology clearly did not have the maturity that it has reached now. For example, when I first started in cryptocurrency, it would take a wallet approximately 2-3 weeks to synchronize. This is because the wallet had to download the entire history of the blockchain in order to operate properly, which was a time-consuming process after being installed. Now, wallets are easily accessible and synchronized from any device connected to the internet.
Currently, we have well-known, respected and most importantly regulated exchanges. The exchanges that I used to trade in the past aren't available anymore. Back then, payment options used at these exchanges were not as secure as of now. Many payments needed to be made through PayPal for instance, without being sure that the deal would be respected.
The Over-The-Counter (OTC) transaction method was also heavily used. When a new asset was introduced and it wasn’t available on exchanges yet, you were forced to execute OTC trades with other users on various forums. As you didn’t know with whom you were dealing, it was common to request to split the transaction into multiple payments to reduce the risk of being scammed. The situation now is fortunately improved, which makes things easier for everyone. Exchanges are now safer and it is possible to use convenient and fast-to-use payment methods such as iDeal. So, I would say that the lowering of the entry barrier is one of the biggest changes.
Well, there are various challenges for cryptocurrency but I will keep it to two, one user-related and one blockchain-related. The main challenge for users, and especially new users, is that the use of cryptocurrencies remains rather difficult. Parties such as exchanges and brokers may have lowered the entry barrier for users in terms of buying cryptocurrency but the true adoption lies in the blockchain with a decentralized wallet.
Most new users don’t fully understand how these wallets work and they connect to various websites until their wallets are completely drained by a malicious website. As everything is decentralized, the chances of you getting your money back are extremely low. If the cryptocurrency market wants to achieve full adoption, these technologies need to have a friendly user interface and experience, otherwise, a large majority of people won’t adopt this emerging technology.
Another major challenge in the cryptocurrency market is the interoperability between the various blockchain technologies, you can compare it with the internet. The reason the internet is so widespread is that all various browsers, mobile devices and computers are able to connect to one another as they all use a standard protocol. The cryptocurrency market lacks this standard as all blockchains were developed independently. Currently, we have various networks that can’t communicate effectively with each other. This has resulted in users needing to use different wallets for the various networks and other methods in order to move their assets from one to the other.
To onboard more users and institutions to the space, the interoperability between the blockchains needs to be smooth and efficient. That’s also why one of my favorite cryptocurrencies is Quant Network, which is aiming to solve this interoperability problem.
Being able to trade 24/7 is one of the greatest features of cryptocurrencies. However, I am looking forward to a moment when it could be possible to buy goods and assets 24/7 via cryptocurrency payment methods, such as a Crypto.com card for instance. At the moment, keeping money in fiat means facing losses of up to 17% per year. Being able to use BTC, and other cryptocurrencies, as a payment method, would unleash a whole new set of opportunities. The same could apply to other assets as well thanks to blockchain technology. For instance, being able to buy goods with tokenized stocks.
NFTs and gaming are also going to provide interesting outcomes for the industry. People can earn money by gaming, which is something I find incredibly cool and valuable. Currently, only professional gamers and streamers can earn money through gaming by means of sponsorships and streaming. Both income streams are difficult to create and require a specific skill set. With the introduction of cryptocurrency and blockchain to gaming, users can truly own their in-game assets, making it possible to sell these assets for a profit. The only resource required is time.
With the opening of new funds in Gibraltar, Luxembourg and Spain we have the opportunity and goal to become the largest cryptocurrency fund operator in Europe. Currently, the biggest fund operator worldwide is the USA based company Grayscale and what they have achieved is immense. As Hodl, we have a mission and vision to become the leading fund operator in Europe, Middle East and Asia as we believe that these markets will have the highest growth potential in cryptocurrency adoption and regulation. We believe that we enjoy the perfect mix to enter the international scene as we offer a secure, accessible and regulated investment into the emerging market of cryptocurrencies.
We truly believe that the cryptocurrency market is undervalued and the expansion to these countries is the foundation we are building for the moment that people realize the true value of the market. Let’s take Bitcoin for example, the benchmark of the cryptocurrency market, there will ever be only 21 million bitcoins available. As time progresses a critical juncture will occur and financial institutions, millionaires and billionaires will understand its scarcity. Eventually, it will be basic economics, demand will increase over time while the supply remains the same, increasing the price and market value.
In 2019, I went to Turkey to build a cryptocurrency exchange that required algorithms to run the liquidity to the platform. Unfortunately, the exchange didn’t launch due to local regulations. However, we truly believed in the potential of the algorithms and continued with the development with the team that was initially created.
Over the years, we have been optimizing and utilizing our algorithms for the Hodl Funds. Besides the continuous improvements on the platform and the algorithms, the team has continued to grow as well. This eventually led to the founding of Growity, which is the exclusive supplier of the algorithmic trading bots for the Hodl Funds. By dedicating a full team of developers and quantitative analysts, we can deliver a variety of algorithms, trading strategies and, most importantly, performance.
After years of developing, we have a fast trading bot platform capable of market making and liquidity providing. We can easily create new algorithms and implement them in the system as the core of the platform is in place. Currently, we are scaling up the team and aim to expand to 20 employees soon.
I feel very attached to Growity because trading is my passion. It’s therefore fun to have a trading side other than the long-only strategy for our investments. Algorithms always execute the tasks given whereas humans may think once or twice before executing. This ensures that the decided strategy is properly implemented. I’m excited to keep working on both Hodl and Growity and overall, I’m looking forward to what the future holds.
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