Btc.sx

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
Trading nameBtc.sx
Industry FX Trading, Brokerage, Financial Services
FoundedMay, 2013
HeadquartersLondon
Websitehttps://btc.sx

Trading

Buying and selling

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

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

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

BTC

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

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

Trade Fees

Open and Close - 0.5%
Gap Losses - zero

Risk Matrix

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]

LeverageStop DistanceRiskReturn (Profit or Loss)Minimum Deposit
10:1SmallHighHigh$5
5:1MediumMediumMedium$10
2:1LargeLowLow$20

Reception

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

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]

Service disruptions

In February 2014 Mt. Gox was struck by a theft, it was the world's largest bitcoin exchange and at its peak handled 70% of all bitcoin trades.[10] The loss of 750,000 bitcoins (at the time worth over $350m) triggered immediate insolvency and caused its subsequent collapse.[11] Following a trading suspension issued by Btc.sx, it was revealed that Btc.sx had partnered with Mt. Gox to offer its brokered trading service and suffered from undisclosed losses as a result of the collapse.[12]

Regulation

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.[13] The DFS guidelines are percieved by many bitcoin companies to be overbearing with fierce opposition coming from Jeremy Allaire, CEO of bitcoin startup Circle.[14]. With operations in New York, the BitLicense regulations will directly affect Btc.sx and similar bitcoin businesses.

References
  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. 5 things about Mt. Gox's crisis
  11. The Guardian - Bitcoin exchange MtGox offline amid rumours of theft
  12. CoinDesk - Bitcoin Derivatives Market Btc.sx Suspends Trading Amid Turmoil at Partner Mt. Gox
  13. New York State Department of Financial Services - NY DFS RELEASES PROPOSED BITLICENSE REGULATORY FRAMEWORK FOR VIRTUAL CURRENCY FIRMS
  14. CoinDesk - Circle: BitLicense Would Force Us to Block New York Customers
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