Why Owning 1 Bitcoin Could Become Life-Changing with Paolo Ardoino

I'm great. Thank you very much for having me.

Bitfinex was born in 2012, so we could call it OG because not many exchanges before Bitfinex survived to this day. We try to maintain that ethos, that philosophy that was at the core of Bitcoin. It's tougher over the years with players that joined late and might not have the same ambition of keeping Bitcoin true. I was lucky enough to join Bitfinex in 2014 as a senior software developer. My career has been all in coding. I started coding when I was eight, I was a hacker for as long as I can remember, then went to university for computer science and math, became a researcher, then was paid nothing as always happens as a researcher in Italy. I decided to move on and learn about finance, studied it by myself, built some financial applications, and then I met the co-founder of Bitfinex and the founder of Tether, Giancarlo Devasini. I joined Bitfinex and since then have completely focused my life on this adventure. For the first two years I was just working on the trading engine, the core part of the platform, designing the next phase of growth, performance, and optimizations. When I joined, all the exchanges felt more like e-commerce sites for Bitcoin rather than actual trading platforms. But we could already see in 2014 the need of stepping up the game because more professional traders were coming in. I was tasked to build the core engine. 2016 was a big year. Bitfinex was hacked on August 2nd, and I was tasked to rebuild the entire platform, take care of security, and become the CTO. Since then I've proudly been the CTO of Bitfinex, trying to keep the platform running. We now have an amazing team that continues to accrue value to the platform while maintaining the good standards of security we set in the early days after 2016.

We also try to do that, maintaining our spirit. It has been, in a certain way, the last few years the change accelerator. Right now you have also ETFs. I remember since I joined in 2014 there was always the meme: institutions are coming. For 10 years institutions were coming but actually were not coming. Every cycle was the new narrative of institutions coming to the space, and then eventually in 2024 you had the ETFs approved. And yes, institutions are finally coming. We were running an exchange that saw different market cycles. There was the ICO boom in 2017, and there was a lot of craziness. The market tanked, and then I remember it was March 2020 with the pandemic when Trump announced closing of inbound flights into the United States because of COVID. The market tanked, and I was very proud in that moment because every single exchange was down. The price of Bitcoin went from $9,000 to $4,500-$5,000. BitMEX and everything was down, and we were there running orders and liquidating in good order the long positions. At the same time we were able to serve everyone with good latency. We always prepare Bitfinex for the worst of the market so that when it comes, we are basically the last man standing. I like that about us. Volumes are of course good on the platform, but really it's the place where when hell breaks loose you can still find liquidity and you can still trade.

That was an interesting decision. Bitfinex now has been running without fees for a few months and remains highly profitable. Keep in mind we have probably the biggest peer-to-peer lending market and so many services. When Bitfinex started, maker and taker fees were around 20 basis points each. Then they became 10, then 20, and basically trading fees were raised to the bottom. The thing that is unfair about fees is that rich guys don't pay fees. Market makers are paid by most of the exchanges to trade there. Instead, the little guys are the ones that pay super high fees. Some of the retail exchanges — I will not name them but the most known exchange in the United States — have super high fees for retail. I always felt like it was unfair, the inverse Robin Hood. We did some calculations and saw that the exchange would remain extremely profitable. We were not subsidizing market makers, we were not charging high fees to retail, and in the end trading fees were negligible in the grand scheme of Bitfinex's profitability. So we removed them. The volume went up, we acquired much more user base, and our peer-to-peer lending market grew to several billions. The efficiency of the system grew incredibly well. I believe many changes will follow our path in the future.

Options — we are servicing options through a partner platform, and they're doing a very good job. Our offering is spot trading with the highest efficiency possible, margin trading where we have the deepest liquidity in the peer-to-peer lending book, perpetuals, options offered by colleagues, and Bitfinex Securities. I'm in big love with Bitfinex Securities because we were pioneers in the tokenized security space. Every time we try to launch a feature, we think: what would be the Bitcoin way to launch a new feature? The way everyone is now thinking about tokenized securities — tokenizing Apple shares and Tesla shares — I think is extremely boring. The idea around Bitcoin was to create the highest level of inclusion possible for people that could not have a bank account, to create an even playing field for everyone. So the Bitcoin way to offer securities would be focusing not on Tesla and Apple tokenized shares, but creating a platform that allows small companies outside the United States that would otherwise have a very hard time accessing liquid markets for capital raises. We first built this capital raise platform, and over the years it kept increasing the liquidity. Now we are going through raises that are in the tens, 50, or hundreds of millions of dollars through Bitfinex Capital Raise. On top of that, we offer secondary markets for tokenized shares, and not only shares — you can raise capital for tokenized bonds or even funds. Think about a great company in Argentina versus one in the United States offering the exact same product or service. The one in the United States would raise probably 20 to 30 times more capital. That is a huge bottleneck for development in emerging markets. That's how we positioned Bitfinex Securities, and I think that is the future of our platform. We have reduced the number of altcoins on the platform. At peak we probably had 400, and now we have less than 200. We are removing the ones that are not trading enough, don't have good liquidity, because the world is shifting towards real-world usage and real-world assets. Bitfinex is focusing on what matters most — creating the right even playing field on the real-world assets landscape.

Our end goal would be all the companies in emerging markets, developing countries that would never have had access to a liquidity pool or a platform to help them raise capital and list their shares — they now have an opportunity.

Exactly. Because usually they would be too small for NASDAQ, and listing in the United States is extremely expensive. You have to go through 16 different bankers, and everyone will milk you.