A VC Told Me: We Don't Invest In Female Entrepreneurs. Exclusive Interview With Gracy Chen From Bitget

For my signature series 'Crypto Opinion with Mike Ermolaev' I had a very insightful discussion with Gracy Chen, managing director at Bitget, where she oversees the marketing and PR side of the leading crypto exchange as well as its growth. As a technology enthusiast, she wants to leverage Bitget's voice in the crypto industry, as well as in fintech and finance generally. Gracy believes that the power of technology should be used for the benefit of society. She is a great example of how passion and hard work can lead to success.

Before entering the crypto industry, Gracy was a TV journalist covering financial news and events for Phoenix Television, one of the largest media conglomerates in Asia. In the same way as me in this series, she interviewed prominent figures in the tech industry. Afterwards, she ventured into entrepreneurship, founding two fintech startups. She soon found herself taking the plunge into the crypto industry, leveraging her previous knowledge to become an early investor and eventually an expert in the space.

The People, Events, And Ideas That Shaped Gracy's Career

“Initially, I mainly invested in the secondary market, such as BTC, ETH, and DOGE, gradually increasing my portfolio to include not only the secondary market, but also the primary market,” she said. 

Among her investments was BitKeep, Bitget's portfolio company and Asia's largest decentralized wallet. That's how she got to know Bitget's founder and the whole team. When the exchange was looking for a marketing lead, she thought, why not apply? That's how she got to where she is today.

The TV shows Gracy hosted featured interviews with prominent figures in the industry, such as Kevin Kelly of Wired magazine. I asked Gracy if there was anyone who left a lasting impression on her and perhaps influenced her career path. 

She said it was an interview she conducted in 2015 with Ray Kurzweil, co-founder and chancellor of Singularity University and now a Google Director of Engineering overseeing a team developing machine intelligence and natural language understanding. She was particularly impressed by his 2005 book, The Singularity Is Near: When Humans Transcend Biology.

“Basically in our conversation and also in his book he had some very interesting predictions in terms of how AI may surpass the intelligence level of human beings. And now you see AI is really everywhere. It's really empowering and changing our life,” Gracy said. 

According to her, AI allows her to complete certain reports and emails more efficiently.

“I guess AI still cannot outperform human intelligence at the moment, but according to his predictions, AI might surpass us in 2045. I think that's quite amazing!” Gracy marveled. 

When I asked her if she really believed that, she said, "I do, but it depends on how you define intelligence and mortality, like whether it is possible to live forever. I think it is. I do believe there is a possibility that people might live forever, meaning emotionally and spiritually.”

However, she expressed doubt that it would be possible physically. 

“Yet all those sci-fi movies like Ready Player One and games like Cyberpunk 2077, in which machines replace parts of our body, tell us something about where technology might go in the future,” she added.  

According to her, that interview ultimately inspired her transition into the VR technology industry, where she worked before moving into the crypto space.

Tim Draper, a prominent Silicon Valley investor and founder of Draper University, was a major influence on the crypto passion Gracy developed, according to her.

“I spent a few months over there studying with him and his team. The team is a staunch advocate of cryptocurrency. As a result, through him, and a few other friends who are very famous in the cryptocurrency industry right now, at least much more famous than I am, I got into the space. They were the channel that introduced me to the crypto industry, but I was interested mainly for two reasons. The first one is the idea of decentralization of cryptocurrency as a challenge to traditional finance,” she said. 

"The other reason is about how we transfer the money. While living in China, it was very difficult to transfer money outside. My tuition fees in the US or my wedding in the Maldives were some scenarios where the transfer of money was very, very problematic. Then crypto introduces a different channel that is so easy to use, like I can transfer BTC or USDT to my friends everywhere, for a very low fee. Basically, this process of remittance and money transfers and storage is quite interesting,” she said.

For context, the China government limits citizens' transfers outside the country to 50,000 USD each per year and only if there is a valid reason for each transfer.

The Chinese government is currently taking positive steps towards blockchain, but the policy regarding crypto and crypto exchanges is more stringent. In contrast, Hong Kong has introduced legislation to regulate digital currency trading, specifically Bitcoin and Ethereum.

“Hong Kong has always been a financial hub with a very positive and well-balanced approach to cryptocurrency. The city is becoming a top location for building web3 businesses, and many of my friends are working on crypto startups there. Hong Kong is reaching a tipping point in embracing crypto as regulations are becoming increasingly clear. In addition, it is becoming more retail-friendly. Combined with a crypto-friendly capital gains tax policy, it is attracting a lot of interest,” Gracy said.

Change Is Coming From The US, But Controversy Lingers

As we discussed Hong Kong's recent proposals for new cryptocurrency regulations, I asked if she agreed with those who claim mainland China would replicate Hong Kong’s crypto regulations in the near future.

“Looking forward, I'm not sure whether the model will be implemented in China in the event that it succeeds in Hong Kong, especially given how different their economic systems are today,” she said. 

I asked Gracy about her predictions for crypto regulations in various jurisdictions this year. According to her, despite different rules across jurisdictions, big players like the US, UK, and EU tend to impose aggressive measures, like licensing exchanges and performing KYC and AML checks. Meanwhile, emerging markets such as Latin American countries are uncertain about their stance on crypto.

“There is also a trend in some countries to raise entry barriers for investors in crypto derivative markets. It is expected that there will be restrictions on individual investors and only professional institutions will be allowed to invest in derivatives. This is a quite common practice in traditional finance. And I guess that this may be adopted by more countries in the future,” she said. 

“We also see that the trading and settlement methods are increasingly required, and the regulators want to ensure transparency and compliance. Last but not least, I would say it’s taxation. Recently, Biden proposed a 30% tax on all cryptocurrency mining power in the US. India also implemented laws to tax crypto mining and trading activities. It's vital for us to stay on top of all these changes and work with regulators to ensure compliance and mitigate the impact on our business,” she added. 

Yet, she believes a wind of change is coming from the United States, but even there there is controversy. 

“For example, the SEC and CFTC can't agree on whether ETH is a security or commodity. There is a federal government, a state government, and various financial regulators. Things are in flux and it's uncertain how they'll turn out. However, I think the US will introduce a lot more regulations in the future,” Gracy said. 

It Takes A Great Product And Sincerity To Sign Messi

Our conversation continued with Bitget's recent partnership with the legendary football player Lionel Messi. Gracy went into more detail about that.

“Messi has always been a very cool role model around the world inspiring lots of people, especially young people who love football. His integrity and credibility are also very strong, which is another reason we chose him. He has always been a very good husband and an example to us all. 

It was the World Cup, so we naturally started with football teams and even nearly signed a national team. After consulting with shareholders, we did feel Messi was the best choice. Also, I'm glad we're his only partner among crypto exchanges,” she said. 

I asked Gracy for a hint on how to get Messi to support my project hypothetically.

“Well, actually it's not a secret at all. They all have their agency to do the negotiation. But I think the key is to show your sincerity. And of course, they also want to look at whether this crypto exchange is safe or not, its compliance level, the user experience, etc., to make sure that Messi is not endorsing bad guys. 

In general, if you want to ensure Messi is comfortable with the brand, first you need to make sure your customers are feeling so. That’s why Bitget has introduced multiple measures to show our security and transparency, for instance, we have a Proof of Reserves page which shows the platform has at least a 1:1 reserve ratio of our customer funds, and they can always withdraw in full. 

In order to give your users a good experience, you should put them at the center. That's something I do a lot. Even on Twitter, when a user tags me and says they have a problem, I always try to help,” she said. 

There Should Be No Gender, Age, Or Racial Bias In The Crypto Industry 

The conversation then turned to Gracy's work on non-profit initiatives for women. The following is what she said inspired her to get into the field in the first place.

“It started with my own passion and, of course, my own bad experiences. I studied applied mathematics at my university. Math is thought to be something guys are better at than girls. I think that's just a very obvious bias here. In my study and working experience, especially in the fintech field, I experienced a lot of gender inequality bias. That's why I'm passionate about these projects and about bridging the gap and eliminating prejudice,” Gracy explained.

“During my time as CMO for my fintech startup, I was the only female partner out of ten. That left me with a lot of questions regarding whether I was worthy. Do I really belong at this table with all these guys? Is it because I'm just a pretty girl? So I had a so-called imposter syndrome. It means sometimes you wonder whether your success is genuinely deserved,” she added. 

Gracy mentioned the initiative Bitget took last year in arranging a charity basketball game with Juventus stars that raised funds for DIY Girls, a nonprofit based in LA that encourages girls to pursue careers in STEM fields. Besides that, she founded an NGO called SheShapes with the support of the World Economic Forum Global Shapers Community. Through systematic sharing and training, it aims to help ambitious women make better career and life decisions.

After that, I asked Gracy what she thought could be done to break stereotypes, especially in the crypto space, and to make women more comfortable with crypto so they wouldn't be scared off. 

“Crypto is a fast-evolving industry. It changes every day and lots of big news is happening on a daily basis. My first piece of advice would be to read, get educated, and update yourself – basically be a lifelong learner. I think that's important and that's also my own philosophy,” she said. 

“And a word of advice for both girls and guys: don't be afraid of reading all those lengthy newspapers and research papers to gain a deep understanding of blockchain technology. You can even learn some coding, that'd be helpful, but generally, be a lifelong learner,” Gracy added. 

On the topic of improving the onboarding or recruitment process for women, she remembered her own bad experience and suggested how the industry can increase female participation.

“For example, when I was raising capital for my own company a few years ago, a VC said to me bluntly, “Gracy, we like your project, but we don’t invest that much in female entrepreneurs, especially those who just got married and haven’t had kids yet.” That was my life stage at the time. Therefore, I think there is a bias towards women sacrificing their career for their families,” Gracy said. 

“I hope this will not be the case for women. It happens sometimes, but don't give up so easily. To be where you are today, you've studied so hard and achieved so much. Even having a kid isn't a problem. At the individual level, women shouldn't be afraid of stepping up for leadership positions. On the other hand, I hope the system can change in regards to not considering those women as a barrier, since they are assets, not liabilities,” she added. 

Gracy mentioned that 40% of Bitget managers are women, emphasizing that this is not an overall number for employers, but for managers. This is an impressive figure, as it shows that the company is dedicated to creating an inclusive and diverse workplace.

“I think seeking a good balance in this gender ratio is important. More importantly, don't even consider race, gender, or age. Examine their abilities and results. Recruiting this type of employer is the only thing an organization should focus on," she emphasized. 

Three Challenges For The Crypto Derivatives Market

Afterward, I asked Gracy to elaborate on her insightful article about the latest trends in crypto derivatives. She said Bitget saw significant growth in its derivatives trading volume, in addition to its overall trading volume post-FTX collapse.

“The fact that we were attracting large volumes was quite surprising given how many people were leaving the industry at the time,” she said. 

Gracy attributed this surge in demand to the fact that they provided their investors with a protection fund of $200 million prior to FTX and increased it to $300 million afterwards, the second largest protection fund in the market after Binance.

According to her, crypto derivatives face three challenges. “First of all, it’s compliance. The industry attracts a growing number of high-profile investors, policymakers, and regulators. They are also imposing a more rigorous and complex regulatory framework. This could create a challenging environment for the crypto companies and investors who may struggle to navigate these requirements while still pursuing growth and innovation,” she said. 

Second, Gracy raised concerns about security and risk control. According to her, derivatives are inherently risky assets, even in traditional finance. As more money flows into the crypto industry, not only is leverage a potential risk, but also cyberattacks and hacking could increase, undermining trust in the ecosystem and causing substantial financial losses to both investors and companies.

“This will require greater investment in cybersecurity measures as well as protocols to prevent these things from happening,” she said. 

She described technology as the third challenge. “It's more about scaling up our technology infrastructure to accommodate higher trading volumes and more users. As a result, significant investments are needed in new technologies, such as a better system, more staff to manage the increased demand, etc.,” she said. 

Crypto Derivatives – A Hedge Or Speculative Instrument?

Continuing the discussion of derivatives, I asked Gracy whether people primarily trade crypto derivatives for speculation or hedging purposes currently.

As she explained, her research team initially thought it looked more like hedging. “One of the hedging behaviors my research team found is that traders hold spot positions while shorting futures. However, these positions were held on different exchanges. So it's very difficult to figure out whether this spot position matches with another short position in futures and hence very hard to judge whether it's hedging indeed,” she said.  

Additionally, Gracy pointed out that there is data based on CME indicators that rely on two fundamental assumptions. The first is that retail investors primarily engage in speculative behavior, while the second is that only accounts that hold both long and short positions are considered to have hedging behavior.

“According to this data, the majority of traders are still speculative and retail investors only hold one long or short position, not arbitraging. It is estimated that there are 15,000 long positions, 16,000 short positions, and about 1,000 arbitrage positions. Based on these fundamentals, I guess speculative behavior still dominates the market,” she said. 

The Bottom Line

"I'm not giving financial advice, but I do think the market is going to be volatile in 2023. Although we are not in a bull market yet, we have moved from a severe bear market and lots of turmoil in 2022 to volatility in 2023. As long as we remain in a bear market, I think it would make sense for investors to consider doing some Dollar-cost averaging.

If someone has never invested before, the first step is to build a small portfolio to get a taste for crypto, because it’s the future of currency. 

The Web3 industry is so new that there is a high demand for talent. Therefore, I hope those in traditional finance can learn more about crypto if they're interested in it and expand their horizons. We recruit heavily around the world. So people who don't invest in crypto can study a little bit and hopefully become pros in this industry," Gracy concluded. 

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