Bitcoin trading platform Btc.sx going global

By Brett Cole

A bitcoin derivatives trading platform created in Australia, btc.sx, is on the brink of securing venture capital funding from investors as it seeks to offer round-the-clock trading in the crypto-currency round from New York, London and Singapore.

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A US-based hedge fund and Asian-based investors are negotiating term sheets with btc.sx founder Joseph Lee and chief operating officer George Samman, who this week departs for New York where he will look to establish an office to cash in on the bitcoin mania.

“When you’re in a gold rush you sell the picks and shovels,” Mr Samman told DataRoom in an interview. “Our business is growing hand over fist.”

About $US140,000 ($154,031) worth of bitcoin trades are daily executed on the btc.sx platform, which enables speculators to go long or short on the crypto-currency with leverage bets of up to 10 times.

Btc.sx’s prices are based on the European bitcoin exchange Bitstamp and since May last year about $US43 million worth of trades have been executed on the Australian platform.

Mr Lee, who worked at Barclays and Macquarie Group, now has a team of five working at btc.sx that is incorporated in Singapore and London, the latter being cheaper than Sydney in terms of technology development costs.

There are about 12 million bitcoins in circulation with a market value of about $US6.78 billion, according to Mr Samman.

The bitcoin spot price is about $US565 but is volatile, with prices jumping from $US20 at the beginning of last year to more than $US1300 towards the end of 2013. The bitcoin price then collapsed to about $US450 after the bankruptcy and criminal investigation of Tokyo-based bitcoin exchange Mt Gox.

Still, Mr Samman says “bitcoin is the future of money”, as many have lost faith in central banks and governments that have re-inflated an asset bubble by printing money, ultimately devaluing their own currencies.

Bitcoin is not the only crypto-currency. There are about 50 such currencies, according to Mr Samman, including litecoin, auroracoin, ripple and peercoin.

Other firms, such as Coinarch, are trying to establish crypto-currency trading platforms.

“Many months ago we had spoken to people at Coinarch about our ideas and future vision,” says Mr Samman. “I guess they saw an opportunity too.”

(Reporting by Brett.Cole@businessspectator.com.au)

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