”The Best Time to Enter the Blockchain Market”: an Interview with Juwan Lee, CEO and founder of NexChange

21 Mar, 2019 17:13
source: source: 奇点财经 Singularity Financial

In early March, Hong Kong was filled with the enthusiasm for the blockchain industry. Hong Kong Blockchain Week, one of the most important blockchain event being held in Hong Kong, attracted participants from all over the world. Singularity Financial has conducted an exclusive interview with Juwan Lee, the event organizer and also the CEO of Nexchange.

Entrepreneur, venture capitalist (VC), blockchain and FinTech influencer Juwan Lee is Korean American. He has 30 years of investment experience in managing portfolios for multi-billion-dollar hedge funds, proprietary trading desks, asset management and VC firms.

Besides being the founder of NexChange, Lee is also the CEO of Arrakis Ventures. He co-created the brand FintTech O2O in partnership with Cyberport. His company NexChange created Block O2O for the HealthTech community that connects blockchain sectors globally.

The rise and brand positioning of NexChange

NexChange was founded five years ago and Lee has positioned it as a venture innovation and media platform with a particular focus on blockchain, AI, HealthTech, and smart cities. The company has four main lines of business that covers media, innovation lab, venture capital and digital investment banking. The four business lines join together and form a set of ecosystem: Led by the media division and executed by events like the Hong Kong Blockchain Week to activate the entire system. In the past five years, NexChange has organized more than 60 events in 10 countries with more than 50,000 participants. “We are the first connection when people think about raising money or getting investments or being involved in the whole ecosystem. The first thing they do is they call Nexchange because we’re very well known in this space” says Lee.

As for the innovation lab sector, Lee explains further: “There are only two things to achieve there [innovation lab] – product creation or system integration.” What Lee wants is trying to do is transforming the innovation lab into a speedy accelerator, to look for funding sources, effective management team, and comprehensive strategies development for enterprises. In other words, the role of digital investment banks is to raise funds on behalf of these enterprises in the blockchain sector.

Close collaboration with the government

The relationship between blockchain and the control system of FinTech often appears as a sensitive topic, but that doesn’t stop Lee from talking about it.  “We maintain a close relationship with governments from different countries for collaborations. Not only did we launch the Hong Kong Blockchain Week, but also was one of the orgnizers in the first 2 years of Hong Kong Financial Technology Week (hosted by Invest Hong Kong). We have 175 speakers from around the world at the Hong Kong Blockchain Week this year. We can’t wait to listen to what they have to share with us,” says Lee.

When talking about the ‘sandbox’ policy issued by the HKSFC, Lee states: “I believe the government of Hong Kong is determined to promote digital asset regulations. This is why they [the government of the HKSAR] created a ‘sandbox” for those who want to regulate digital currency exchange, so regulators will eventually move towards the direction of licensing. At the same time, you will need a license to operate if you invest more than 10% of your portfolio as a fund in crypto assets – we call these policies as step-by-step regulations. I think the government of Hong Kong is just sitting on the side – observing and waiting. They do not want to take the initiatives on regulations yet because they want to see what’s going to happen next in the digital market asset, in which will help composing the directions of the regulations.”

Regarding the regulations in the US, Lee notes: “The world has been keeping an eye on US regulations. I don’t think there will be a regulatory change but even if that happened, it doesn’t necessarily mean the rest of the world will follow. We will all release our own versions of regulations as time goes by. ”

The cautiously optimistic forecast for blockchain and blockchain’s future

As a large-scale event planner, Lee is able to identify the leading indicators of the industry’s prosperity from the number of applicants and guest speakers. As the organizer and observer of the whole event, he was surprised by what he saw – he noticed that some projects are actually leading the others and there’s obvious growth in the development of blockchain technology. “We are still waiting and watching but we will have to be optimistic in a cautious way,” says Lee.

As for the subindustries, NexChange is shifting their focus on low-cost mining and hosting companies. Although the bitcoin price has been staying low in the past year, the low-cost mining companies are still capable of generating high profit margin for the vendors.

Meanwhile during the Hong Kong Blockchain Week, NexChange announced the establishment of Nexyst, a digital fund, funding platform. The objective of the platform is to provide solutions for asset owners such as pension fund and investors to invest in a curated list of digital asset funds. In the asset allocation, these funds will have to configure the alternative assets represented by digital assets.

Stable Coin has the need for large customer base

Speaking of the current trend of stable coin, Lee believes that it provides more stable conduction similar to fiat currency, thus providing liquidity. He indicates: “I’m very interested in what’s happening in the stable coin arena because it allows large institutions to get involved.” However, Lee also mentions: “It is invalid if it is not being widely used; it is also invalid if there’s no liquidity – it is just a product without an audience. I’m only willing to invest in projects with active users or liquidity.” He used ETF for further elaboration: Each type of target (such as stock index, gold, etc.) corresponds to different types of ETFs, but it seems that only one or two of which has liquidity.

In relation to the cryptocurrency launched by JP Morgan, Lee believes that it’s just a matter of time before other banks do the same.He also thinks that governments will issue their own cryptocurrency in order to sooth the impact of hyperinflation to their local currency.

Market speculation and the growth

Finally, Lee concludes that technology that gains tremendous amount of attention often causes certain type of hype. In the blockchain sector, the process of huge hype and bubble burst has already happened.  He predicts that the hype curve will eventually intersect with the reality curve, which is exciting: “Based on the return of investment, the right standards, and tangible evidence, we are about to witness a more effective way of blockchain investment. And now is the best time to enter. ”