Ville Runola is the CEO of the Finnish crypto exchange Northcrypto. He has certainly one of the best vantage points in Scandinavia for the world of cryptocurrencies. We asked Ville for his thoughts on the current bear market and the year 2023, which is soon about to begin.
If you are not yet familiar with Northcrypto, read our in-depth review here.
Northcrypto and the crash of FTX
Let’s start with a hot issue. At the time of writing (11/2022), the investment world is still in shock after the collapse of the crypto exchange FTX. This was one of the most famous trading platforms on the market and a company worth up to $30 billion.
We don’t know yet the ultimate impact of the crash on the broader market. However, one thing has become clear. Investors are prioritizing the safety and reliability of crypto exchanges more than ever.
Has the crash of FTX had any impacts on Northcrypto’s day-to-day operations?
Ville Runola commented in a recent interview with Yle that it has provoked contacts from Northcrypto customers. People want to know that Northcrypto is not misusing customer funds, as was the case with FTX.
— Northcrypto Suomi 🧭 (@northcrypto_fi) November 18, 2022
Northcrypto has also seen a significant increase in transaction activity.
“Some customers have transferred funds from foreign exchanges to Northcrypto’s custody,” Runola says.
Northcrypto is regulated by the Finnish Financial Supervisory Authority. This means that customer funds must always be kept separate from the company’s assets. This regulation ensures that the client is protected even in the event of bankruptcy.
FTX’s bankruptcy has also wider implications for the crypto market. Runola recently speculated in Kauppalehti that more dominos will be falling.
“It seems that the full impact has not yet been seen. Now we wait for the dust to settle and see how much damage has been done to the market.”
The year 2022 has seen many crashes. Terra Luna, hedge fund 3AC, and lending service Celsius, among others, hit the headlines in the spring. According to Ville Runola, people will certainly be more aware of the services they use in the future. He also expects the use of personal wallets to increase.
Ethereum attracts investors
At the time of writing (11/2022), we are going through the bottom of the current bear market. The investor behavior is very different from that of a bull market. Risk-taking is reduced and trading volumes drop significantly.
An interesting detail was revealed in the Q3-2022 report of Coinbase. Ethereum had overtaken Bitcoin in popularity for the first time. Is this trend also taking place at Northcrypto? Ville Runola confirms that is the case.
“The exact same phenomenon is also evident among our customers. Ethereum has been more popular than Bitcoin.”
According to Runola, there is also a visible reduction in trading. The swing trading typically seen in a bull market has given way to DCA. The term DCA stands for dollar-cost averaging. It means the same as monthly saving, basically buying at regular intervals regardless of the price.
At Northcrypto, it is easy to set up an automatic purchase in euros for specific cryptocurrencies. You can then schedule a transfer from your online bank to your Northcrypto account, for example, once a month.
“There is also a HODL attitude,” says Runola. “Some will always exit the game in a bear market, but long-term investors will hold and add to their positions when the prices are down.”
One of the phenomena of 2022 has been the strength of the US dollar. Typically currencies move by a few percent year-on-year, but the euro, for example, has weakened by about 15 percent against the dollar—quite a difference between keeping euros and dollars in your account.
The graph below shows the fall of the euro against the dollar.
Northcrypto provides easy access to the dollar via the USDC stablecoin. Have the company’s customers parked significantly more assets in the USD Coin instead of euros? According to Runola, this kind of activity is not yet common.
“The USD Coin has not been used much as a hedge against euro vs. dollar fluctuations. The main use case has always been in the DeFi protocols. Euros are converted into USD Coins which are then transferred to DeFi apps like Aave. Northcrypto is a popular and regulated fiat on-ramp for many active DeFi users.
We recommend readers keep an eye on the relationship between the dollar and other fiat currencies in the future. For example, if you have tens of thousands of euros in your portfolio, a change of 10-20% in purchasing power per year is significant. USD Coin is currently the most regulated stablecoin in the market.
Access new services through private banking
As mentioned above, 2022 has been a very challenging year for the entire crypto industry. Several billion-dollar companies have gone bankrupt. In this respect, it is a very exceptional year in the history of cryptocurrencies.
Northcrypto is doing well so far. The Finnish operator has grown smartly, unlike many foreign companies. Of course, the volume of trading is lower than last year. This was also very visible in the Coinbase Q3 report.
“Despite the bear market, there has been a nice increase in customers. We have managed to increase our market share in 2022,” Ville Runola says.
Northcrypto’s main competitor in Finland is Coinmotion. It has been in business for several years longer and has built up a larger customer base. Northcrypto opened its doors to Finnish customers in the spring of 2019.
Northcrypto took recently steps toward more professional portfolio management by launching a Private Banking service. Through PB, clients can invest in any cryptocurrency, earn yield, and get expert guidance in building a portfolio.
Have Private Banking clients been spooked by the sharp fall and sold their coins? According to Runola, this is not the case.
“The portfolio of PB customers is slightly different from typical Northcrypto users. PB portfolios have more investments in smaller cryptocurrencies. This is made possible by a much wider range of choices. PB customers also make purchases on an ongoing basis, meaning they have not exited the market.”
If you are interested in a Private Banking account, please contact Northcrypto on this page.
The year 2023 looks brighter
So, let’s look to the future. This bear market will be over eventually, and investors will rush back to crypto. Could this happen in 2023 already? This is how Ville Runola sees the current investment climate.
“It is easy to agree with the view of a weak global economy. Central bank rate hikes are not over yet and there is still a lot of global uncertainty. However, I believe the situation will improve in 2023.”
Ville previously thought that the crypto market would show signs of improvement by the end of 2022, but the crash of FTX has changed his forecasts, as well as everyone else’s. “It looks like the year 2022 will and with a more negative tone than expected”, Runola responds.
Last year saw a lot of technological innovation and an NFT boom. This autumn saw the successful completion of Ethereum’s The Merge update. What areas of the crypto market is Ville Runola most interested in?
“Scaling, especially when talking about Ethereum. It’s been a big story since 2021 and is guaranteed to be in the headlines next year.” Runola is following the development of ZK Proofs in particular with great interest.
The team at Northcrypto has tons of DeFi expertise, which you can access as a Private Banking client. In addition to Ville Runola, many of the company’s employees are following closely the new innovations in the DeFi sector.
New cryptocurrencies at Northcrypto
Finally, let’s take a look at the future of Northcrypto. As mentioned earlier, the company has continued to grow and develop despite the bear market. What can we expect to see in 2023?
“We will continue to focus on our strengths, which are the ease of use, reliability, and quality of customer service.”
Runola does not see that Northcrypto would be competing against foreign giants. The company’s strengths are reliability and security, which are also coming through Finland’s strict crypto regulation.
“Above all, Northcrypto offers an easy and hassle-free way to buy and sell cryptocurrencies. Not only novice users but also many “OG” investors use Northcrypto to move their euros into the crypto market.”
Ville Runola says that the company will also focus more on the Swedish market.
What about the selection of cryptocurrencies? Northcrypto added two cryptocurrencies (Aave & Chainlink) in April 2021 and two new coins (USD Coin & Polygon) in February 2022. Will the selection also increase in the spring of 2023?
“Yes. The crypto selection will be expanded in early 2023. But let’s leave the names of the cryptocurrencies a mystery for now.”
This is how Runola commented on the question of new cryptocurrencies. Let’s wait and see what cryptos are added to the selection next!
We recommend Northcrypto to both beginners and professionals. Click the link below to open an account.