Coindesk article on bitcoin derivatives

It has brokered 35 million in transactions, leverage is at 10x margins


Bitcoin derivatives

Derivatives are instruments that allow investors to trade in something indirectly. As the name implies, they are “derived” units of value.

As such, derivatives are predicated on the idea that you can manipulate your position towards a security (eg a stock, a bond – or a bitcoin).

Singapore-based BTC.sx is currently the most popular platform for doing this. In November, BTC.sx reported over 2,000 registered users. A recent press release announced that the company had since brokered over $35m in transactions.

The company’s interface is simplistic, offering users only two buttons: ‘long’ for when investors think bitcoin will go up, ‘short’ for when the value will go down. But the UI probably belies the type of person that will really use BTC.sx.

“Those who use our platform are pretty sophisticated investors,” said George Samman, the chief operating officer of BTC.sx.

“We are a 24/7 operation where you can hedge at spot at all times as this volatile markets price constantly changes.”

Investors should be sophisticated: BTC.sx allows its customers to trade on margin.

This means users can place leveraged bets on the platform: “Customers on BTC.sx are able to go long or short on bitcoin with our platform. We offer 10x margin on their bitcoin,” said Samman.

It’s proving to be popular, and Samman says that the company really saw a huge spike in interest in the latter part of 2013. “We really started to see more interest in BTC.sx around October, when the price went from $200 to $1,200,” he said.

The company is now raising money to expand its operations.

USD Trade Volume. Source: Blockchain.info

USD Trade Volume. Source: Blockchain.info


Other companies mentioned in the article include ICBIT (russia), Pawncoin, Coinsetter