What Crypto Traders Really Need in 2026 Explained by Phemex CEO

[00:00:00]Crypto trading is much more than just buying and holding. It's about predicting markets. It's about trading bots. It's about pre-IPO tokens. It's about stock indices. It's about [music] everything financial. For a long period of time, there was a problem because a lot of platforms offered these services and features differently. Well, thankfully, some exchanges are solving this, and Phemex is one of them.

[00:00:25]We have Federico, the CEO of Phemex. Uh we're going to talk about a lot of the exciting stuff, and if you guys have any questions, any trading questions, you guys can leave on the comments. And we'll, of course, be sure to answer that. Federico, thank you so much for taking time.

[00:00:41]>> having me. Thank you. So, let's go to the conversation directly for our audience here.

[00:00:47]How do you see that crypto trading behavior has changed over the couple years? You obviously have the big bird's-eye view of running an exchange of this scale. So, yeah, fill us in.

[00:00:58]Yeah. Um I would say the crypto markets are in a sort of lull right now. Um I would say the biggest difference compared to uh a few years ago is, I would say, perhaps the lack of excitement and innovation that we used to see um across different chains, protocols. I think that the space used to be a lot more uh innovative. Um I think uh right now the platforms that are doing their job are the ones providing trading opportunities uh for users, such as exchanges, whether they are centralized or decentralized. Um but crypto is not offering much to trade at the moment, and that's why we have seen like a significant shift into um traditional markets, tokenized assets, uh RWAs, and these kind of products, which are non-crypto-native, even though the approach might be crypto-native through uh tokenization or or on-chain equity. Um so, generally, I would say that's the biggest difference from a few years ago, and I hope this is going to change. So, I hope that um this current situation is not is not going to be forever. It's going to be temporary. And I think a new age of innovation is probably coming soon led by prediction markets as well as more experiments, as you said, like pre-IPO perpetual futures contracts. These sorts of things are very interesting. And I think that's the niche that crypto used to fill. And right now, we are not filling anymore for some time. Absolutely. And I And I see that Phemex has been expanding a lot in terms of the services offered to the users.

[00:02:30]It's really encouraging to see because a lot of crypto exchanges are. And personally, I think that crypto's biggest problem, even today, is accessibility. A lot of people people that want a lot of things, they don't know which platform to use, you know. I might be interested in perpetual futures. Someone might be interested in prediction markets. Someone might want to copy trade or, you know, trade like with trading bots or AI bots. So, it's it's cool to see that Phemex is bringing all of this together in a in one, you know, umbrella platform. But, I want to know what's your core thesis about this expansion? Like, what's your vision?

[00:03:08]Like, which kind of features in the future also do you have in road map? And how do you plan to kind of stack this into one single platform for all financial, you know, activities? Yeah.

[00:03:21]So, I would say that currently crypto users can be split into two categories.

[00:03:26]So, the more conservative ones are still using centralized exchanges. They trade crypto, but they're generally interested in some kind of like general financial management. And then you have the more crypto-native users that are more active on chain.

[00:03:38]And they might find a DEX more suited to them because like trading on DEXes provide more upside. You're not only the customer of a of a business, you're also in part owner of this business. And you can benefit from the growth of of business.

[00:03:51]Nevertheless, there are some some some complications with DeFi such as self-custody. Uh, we have seen a lot of hacks recently hitting um DeFi protocols. So, I would say generally uh that uh users have to decide for themselves and where their for their their priorities lie and where whether they are okay with this trade-off in terms of like uh making sure they are they are self-custody in their own assets or taking some risk by operating on chain.

[00:04:17]While centralized exchanges will continue offering some kind of like overarching product that um engulfs every innovation happening in crypto. So, if you trade, uh for example, on Uniswap, you cannot access the tokens that are launching on Solana on the same day, for example, right?

[00:04:33]But, if you trade on a centralized exchange, most centralized exchanges now offer uh integrations with on-chain markets directly from um the centralized exchange interface.

[00:04:42]So, you don't need, for example, any wallet management or having to switch chains. All these kind of things are abstracted away from the users. So, I think this trend will continue, which in some way makes centralized exchanges very competitive as as uh tools in in this market. Uh, on the other hand, I think these uh could create some advantages for some more specialized tools that can arrive in certain specific areas for specific on-chain markets. So, centralized exchanges will never be able to cover every niche of the market, and they will always be a little bit late in that regard as opposed to the real bleeding edge of of crypto, which will be happening on chain. Absolutely. And you mentioned prediction markets a bit.

[00:05:19]Let's talk more about that. Um, I think like one of the latest news uh recently coming out of MXC is that you guys have integrated uh prediction markets within your platform, which is great to see.

[00:05:30]Uh, but like prediction markets, they had their breakout moment during the the whole US election, and since that it's just grown. People are uh predicting or betting on every single outcome they see across the world. And I see the demand itself, but what is your kind of prediction? Why what as an exchange where do you fit into this prediction market breakers because platforms like Polymarket culture that they're so popular and what's your goal with bringing prediction market as a category within an exchange?

[00:06:01]>> Right.

[00:06:03]My belief is that prediction markets are probably one of the best marketing tools that ever happened to crypto. It says that people might not even realize they're actually operating on chain.

[00:06:16]But the simple fact that theoretically you could predict or invest in any outcome of real life events, sports, as well as financial developments and IPOs, all these kind of things. It's great. I think that it opens a huge amount of opportunities for both users and platforms.

[00:06:39]At the same time the great advantage of these platforms is that you don't need necessarily for this market to be liquid or even popular. But the simple fact that the market exists for a specific outcome or event is already good marketing, right? Because you can kind of like latch yourself onto anything that's happening around the world.

[00:06:59]In the same way as a centralized exchange can list a token being successful on Solana or a token being successful on on Ethereum or whatever.

[00:07:07]In the same vein, I think prediction markets can in a way monetize every kind of trend or happening in the world in a way that will not be possible otherwise.

[00:07:16]You cannot have like a perpetual futures contract for everything happening in the world because it's not going to work in terms of liquidity, who's going to provide it and these kind of things, where's going to be the volume.

[00:07:25]But prediction markets, I think they have this incredible edge against the rest of products currently operating in in the market. So, I think it would be missing out not offering these tools to to the traders on your platform. So, we were one of the first exchanges to actually uh um incorporate the the user interface of Polymarket into our exchange rather than trying to build our own prediction market from scratch. So, I think this is the way to go for centralized exchange.

[00:07:52]If someone is building a good product, you can simply uh embed it into your own platform and both you and the platform share mutually divided the benefit.

[00:08:02]Absolutely. I think I like the fact that you mentioned that most people don't know prediction markets are on chain. And this kind of funny thing happened I think last week where a couple of dark web forms are selling they saying that they leaked Polymarket data. But Polymarket, you know, rebutted and say these are on chain available for everyone to see.

[00:08:23]What are you What are you claiming here? So, yeah, no, that's that's that's really important. That's it's it's a big marketing tool for crypto. But as always, there is a risk.

[00:08:33]Um and uh you know, uh I don't know if a lot of people might consider it a risk a gray area because some countries in Europe have uh pushed back against platforms like Polymarket, you know, pre- prediction markets as a category as general. Some jurisdictions still debate whether it should fall under gambling law or not. Whereas, some are more relaxed and there's also a split in the US itself in different states. So, do you do you think as an exchange when uh you offer prediction market services, is does that become a kind of risk for regulatory concern in the future for whatever might happen to this new and growing category? Yeah, uh the advantage of a centralized exchange is that you can always uh allow certain IPs from joining, certain from not. And you require all users to to KYC when when they join your exchange. So, you can always tailor the product to the different um like geographical location that users access to, right? So, we were able, for example, to block this integration from certain markets such as Germany that have stricter laws, but there is no reason why this product should not be available to someone in a region where these uh regulations are not are not as as strict. Um I think generally the main issue with the with this situation is that uh crypto moves very fast. So, it's difficult for regulations to to catch up. We've seen now the we with Mika and everything like took so long for a for a framework to to kind of arise. Um but by the time that our framework is in place, the market may might have already moved on. I'll just give an example, the Italian government um issued some some specific laws a few years ago that finally so solved the the issues of of NFT trading or whatever, but NFTs are kind of like gone in a way as a as a trend, right? So, regulators will always be a little bit late since we are like a fast-paced industry that is moving um at a progressively high speed. I would say that as a centralized exchange I was our role is to make sure that each individual user is compliant with the regulations of its own of its own country. That's interesting.

[00:10:41]That that that tells me that uh operating or accessing through exchanges like Femex, you know, that makes prediction markets more in a regulated area that you know that that that's more safe, I'll say, and perhaps regulators will someday will understand that that's the that's the way to channel these kind of you know products. Uh but yeah, no, moving on, uh I would like to talk about everyone's favorite topic, AI.

[00:11:09]I presume Uh that's all we talk about these days, but uh look, AI in terms of crypto, in terms of trading, uh there are a lot of debate.

[00:11:20]Uh obviously, it's unquestionable how uh advanced some of the AI tools and trading bots, you know, trading features are, how they've helped.

[00:11:29]It would be criminal to say that we don't uh come across a tweet or post every day that someone has helped have you know used AI to do this turn this much profit and do this much profit.

[00:11:40]But of course not a lot of people are still you know confident in letting AI kind of manage or trade their finances. So there's there's this debate. So how how is Phemex kind of you know embedding these AI features? What do you see the benefit or risk of AI in trading? Yeah.

[00:11:58]I think that AI can be a great tool for retail users interfacing with a very complex market. So when someone joins the financial the capital market financial markets or what or what not there might be a lot of concepts they're not familiar with such as market cap fully diluted valuation earnings all these kind of things.

[00:12:19]And I think having a co-pilot like giving you all this information is an essential tool for for anyone that is thinking about starting to trade or investing. When when when we enter the market in 2019 all these tools were not available right? A lot of the users had to learn this from documentation scattered across different websites YouTube forums all these kind of things were were very niche so a lot of this information might have been difficult to acquire or wrong because people that giving you this information might have some interest in giving telling you like why a high FTV low market cap is good or bad depending on what they're selling to you right? So I think these tools kind of like create like an equal starting place for all people joining the market in a way. At the same time right now they're not really replacing I would say a financial thesis that you develop on your own. Like you are still not able to ask AI to give you like a thesis to trade this specific period in time and make sure that you're actually making money because like the way markets work like there is an edge to any kind of like thesis. So if AI is giving it to you it's also giving to you to potentially thousands of other people, so there is no edge anymore because everyone has access to the same information. Like if we're all trading off cloud or or ChatGPT or whatever. So, that point the question will be like, "Okay, will all users have access to the same sophisticated market models?" And that's a difficult to say, of course. Like the probably the the highest end models, if they achieve financial kind of profitability, I don't think they will be available to to retail users and mass because otherwise the they will be pointless. Um so, what we're trying to do with Fimex is giving users clear access to these tools to develop some strategies, maybe a little bit different from what they would normally do, which is for example going long or going going short, but maybe build some kind of like grid bot um or providing liquidity to a specific market or like trading specific strategies. So, you just ask AI, "Okay, can you kind of like give me some kind of like uh quick-tuned uh bot that can trade these specific ranges and these specific volatility?

[00:14:22]And when these indicators meet, then do this." And then the AI can easily do these kind of things for you, but it needs a human input that goes beyond just make me money. But do you think that these features you know, right now, even on your on on Fimex itself, is is easy enough for any user can jump on and use it? Or does people still need some kind of AI literacy or some kind of you know, knowledge about trading first to access those? Um so, I I think these tools are pretty beginner-friendly. I might be maybe overestimating how much people know about finance.

[00:15:02]Um but I think with just maybe a day of two or a day or two of work, you can basically get a good grasp of the basic concept and then like the the the tuning of the of the instrument itself should be rather fast.

[00:15:15]>> Interesting. Let's talk about strategy trading a bit. It is uh kind of a new term, I would say. Uh not a lot of, you know, retail traders would potentially understand this. Um so, can you explain to me like what is strategy trading? And you know, how big of a part of your uh crypto accessibility or, you know, like making crypto trading easy for users a big focus of this kind of feature? Yeah. Uh probably the reason why most retail traders don't stick to a strategy is because they tend to be a little bit emotional or like just react to the news. Um but, I think AI gives some opportunities to kind of like set a strategy ahead of your trading and then let it run and then test it out, adjust it, and so on.

[00:16:01]So, I think the simple fact that you have to think of a strategy ahead rather than trading emotionally, I think it's a good starting point for any kind of new trader joining a market. So, rather than trading what you see, you kind of like develop a thesis by yourself. You develop an approach, you study it, you can backtest it, you can try it on the market for a little bit, adjust it. I think that's already an advantage over like, "Okay, what's happening today? I need to react right now." because that's how most people end up uh losing their trades. So, all of these things that we've been talking about, this kind of the the conversation kind of boils down to one single, you know, term that's multi-market environment.

[00:16:37]That's where I would say Phemex operates right now.

[00:16:40]Uh it's uh amazing that uh you know, for exchange to get into this game so early.

[00:16:46]A lot of other exchanges are of course trying their heart and soul to get into this multi-market strategy. But, uh kind of talk or honest through the risk management strategies that Phemex is uh using in this environment because a couple years ago, you know, when you're running a crypto exchange, it was all about making sure that the crypto side of things, there was no hacks, you know, making sure you had, you know, there was audits to making sure there was reserve assets there, and stopping a contract exploits. But right now this prediction market has its own different kind of set of insider trading. You know, a batch of futures it has its own different kind of threat that can collapse a market. And then there's strat fire side of things.

[00:17:30]So how do you manage all of this risk?

[00:17:31]What what, you know, mechanisms does BitMEX has? Yes. So it's a multi-faceted problem that involves a lot of different aspects. It's kind of like clockwork in a way in the in which one part sustain the other and so on. Um the the main concept is that like you have like your own reserve assets, right? And you have to make sure that the users are always like levered up to a point to which you're not they're not facing insolvency essentially.

[00:18:00]And you always have to make sure that the collateral is essentially respecting the amount of leverage or volatility that it's currently ongoing in the market. We have seen even like the highest quality protocols such as hyperliquid running into some issues when for example you list certain assets that might be manipulated. So I think that's one of the biggest issues that is facing both perpetual futures and prediction markets, right? Also manipulation of this market. But as a centralized exchange you have some tools in which you can kind of manage the way you have control over like the the opening the maximum open interest you can have all these kind of things on a specific contract.

[00:18:45]>> So by being just 10% more careful you resolve 90% of the problem. So I think that's what hyperliquid learned during that jelly jelly incident around a year and a half ago if I recall correctly. And as a centralized exchange you're always in that position as well in which you maximize it doesn't take a lot to make sure that these kind of incidents don't happen.

[00:19:05]It's just that a lot of a lot of like many times you're kind of like running against the request from the users in a way. they want more leverage, they want more listings, and you have to make sure that these kind of things can be balanced with a safe trading platform.

[00:19:20]Amazing. Well, so it summarizes it perfectly.

[00:19:24]As I said in the beginning, crypto trading is much more than just buying and holding the next token these days. It's about everything.

[00:19:31]It's about multi-market, prediction markets, futures, perpetual trading, trade five, pre-IPO tokens, everything.

[00:19:37]Everything you can do in different exchanges. Phemex is definitely one of them. It's one of the earliest movers.

[00:19:42]So, if you have you know, access to this exchange, you can do a lot of things, and why not?

[00:19:47]It was amazing talking to you, Federico, but before I let you go, I have to ask you one question that I cannot let any guest go without. What is your Bitcoin prediction for the year end? For the year end, this year?

[00:19:59]>> Yeah. Um so, I think actually yesterday's news that that Michael Saylor might sell some Bitcoin is bullish. I see it as as a positive thing overall. So, I hope he's going to sell some Bitcoin now, so we can kind of like, you know, get over with this, just, you know, bottom out 50K, 60K, whatever, and then we can like reprice the the bull market. So, I think like he's currently like one of the strongest pain point in for BTC price action. So, I think the fact that he's finally going to sell some will just create some shorter short-term panic, and then we can go back to all-time highs. I think by end of the year, like, I think we might revisit all-time high at some point.

[00:20:37]>> Amazing. And that that's what's been echoing throughout the crypto leadership space. Federico, thank you so much.

[00:20:42]Thank you so much for all these insights, and it was lovely having you.

[00:20:51]>> [music]