BTC.sx (Magnr)

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BTC.sx logo

Btc.sx is a multinational company that engages in leveraged bitcoin trading and brokerage. The company offers a trading platform in digital currency derivatives such as margin trading to retail traders. It was founded in 2013 and is headquartered in London's Silicon Roundabout. ZDNet reports Btc.sx to be one of the first bitcoin companies that voided the necessity of all other currencies other than Bitcoin.[1]

The company was launched from Sydney, Australia, and is run by CEO Joseph Lee who co-founded the company alongside George Samman and Vincent Hoong.[2] Shortly after its launch, Lee moved operations to London favouring a dual incorporation model between Singapore and United Kingdom.[3] The company also has operations in New York.

Btc.sx is one of the largest platforms of the cryptocurrency market, which trades not the most cryptocurrencies, but derivatives - that is, derivatives. The main types of derivatives are futures and options contracts, under which the seller undertakes to transfer the asset to the buyer (in this case Bitcoin) at a certain time at a certain price. At the same time, the price of the contract itself is not fixed and changes in accordance with the market situation. With the help of derivatives, you can both earn on the price difference and hedge your risks by buying (or selling) bitcoins at a specified price, which will not change until the end of the contract.

Trading[edit]

Joseph Lee from BTC.sx - Bitcoin Singapore 2013

Buying and selling[edit]

Users of Btc.sx can open long and short positions using the proprietary trading platform. A corresponding buy and sell order is then placed out to market at a matching exchange with or without leverage. All positions opened will have a corresponding position placed out to market meaning that any profits gained or losses generated from market movements will be passed on directly to the client.

Position Deposits[edit]

Trading at Btc.sx is done on a pre-paid basis. In order to open a position, a deposit is taken which acts as collateral. This collateral will act as an equivalent of a margin call. This is the price at which a position will be automatically liquidated if losses accrue to the deposited amount. The margin call is shown as a stop price when the position is opened. A larger deposit will enable a bigger stop distance to be chosen. This can result in larger losses if the price moves against the desired direction.

Features[edit]

  • Leverage - 10:1, 5:1, 2:1
  • Volatility Multiplier - 15%
  • Execution Type - at best execution over ECN
  • Minimum Trade Size - $5 equates to ~$50 Trade at 10:1
  • Maximum Trade Size - $1000 equates to ~$10,000 Trade at 10:1[4]

Fees[edit]

Transaction Fees[edit]

BTC[edit]

  • Deposit - zero fees (minimum of 0.001 Btc)
  • Withdrawal - zero fees (minimum of 0.001 Btc)

Funds are deposited once 3 confirmations are recieved, this is a process that typically takes 30 minutes.

USD[edit]

Btc.sx does not accept fiat. All positions deposits are in Bitcoin.

Trade Fees[edit]

  • Open and Close - 0.5%
  • Gap Losses - zero

Risk Matrix[edit]

As well as magnifying trading gains, losses can similarly be multiplied. For beginners, it is widely reccomended that trading with a smaller amount of leverage will result in a lower risk whilst learning about the platform while trading. Despite its higher minimum deposit, potential losses will be minimised due to the unlikely nature that a stop limit will be reached.[5]

Leverage Stop Distance Risk Return (Profit or Loss) Minimum Deposit
10:1 Small High High $5
5:1 Medium Medium Medium $10
2:1 Large Low Low $20

Reception[edit]

Following the Mt. Gox collapse, Btc.sx announced a new exchange partnership with Bitstamp now placing its orders out to market.[6] The trading platform announced in March 2014 the brokerage of over $40m in brokered transactions.[7]

Capital investments[edit]

In April 2014, Btc.sx recieved 500 bitcoins from the seed accelerator, SeedCoin in its first fund raising round.[8] The company has recieved a total of US$0.45 million investment as a result of initial capital injections and its equity fundraising activities.[9]

Regulation[edit]

Btc.sx operates in a climate of regulatory uncertainty with no specific laws enforced to provide protection to its clients globally. The New York State Department of Financial Services who is overseen by Superintendent Benjamin Lawsky hopes to be the first regulatory body to provide a full framework for virtual currency businesses.[10] The DFS guidelines are percieved by many bitcoin companies to be overbearing with fierce opposition coming from Jeremy Allaire, CEO of bitcoin startup Circle.[11]. With operations in New York, the BitLicense regulations will directly affect Btc.sx and similar bitcoin businesses.

Bitcoin-derivatives[edit]

Magnr logo

Joseph Lee, BTC co-founder and technical Director.sx, believes that Bitcoin trading is now entering a second phase of development, which, in his opinion, will be characterized by the provision of advanced financial services that go beyond simple currency exchange.

Anthony Lewis, Director of business development, said that the integration allows itBit to offer a more diverse set of offerings for customers: "We offer a thorough, multi-functional and easy to use platform, and we are very happy to work together,” he said.

The statement was made at a time when cryptocurrency exchanges are seeing an increase in the number of trades involving derivatives, swaps and other more sophisticated financial derivatives. OKCoin, for example, introduced margin trading on its platform in June, there are still exchanges with such offers - including BTC-E in Europe and Bitfinex in Hong Kong. If trading is in the customer's favor, bitcoins will be credited to the Deposit; if not, the Deposit amount will decrease. It is noteworthy that the auction can take place only in Bitcoin.

Lee said that the team itBit and BTC.sx was looking for ways of cooperation in Asia Singapore conference in 2013, then BTC.sx was chosen by the startup incubator to launch the Seedcoin start-up Fund . "We are ready to realize the real potential for trading and take a niche in the market, which is not yet developed, Lee said. "Exchange is a very important part of this process because it actually transfers bitcoin to the real stock market.“

BTC.sx aims to add more exchange partners, and itBit is expanding its presence in Asia. The company's services are now available in five languages, which include simplified and traditional Chinese.

External links[edit]

References[edit]

  1. ZDNet - Startup opens Bitcoin-only margin trading platform
  2. | accessdate=2014-08-21 Btc.sx - About the Btc.sx Team
  3. Australian Financial Review - Tech start-ups leave Oz over tax
  4. Btc.sx - Trading Fee Schedule
  5. Btc.sx - What is Leveraged Trading?
  6. Btc.sx - Normal Trading Resumed
  7. CoinDesk - Bitcoin Derivatives Platform BTC.SX Resumes Trading After Mt Gox-Induced Freeze
  8. CoinDesk - Trading Site BTC.SX Receives 500 Bitcoins in Seedcoin Funding Round
  9. ZDNet - Startup opens Bitcoin-only margin trading platform
  10. New York State Department of Financial Services - NY DFS RELEASES PROPOSED BITLICENSE REGULATORY FRAMEWORK FOR VIRTUAL CURRENCY FIRMS
  11. CoinDesk - Circle: BitLicense Would Force Us to Block New York Customers

See Also on BitcoinWiki[edit]