The latest Bitcoin.com podcast is out! In this episode, host Gavin Knight talks to Arthur Hayes, co-founder and CEO of Bitcoin retail trading platform BitMEX.
Hayes previously worked for Deutsche Bank and Citibank in Hong Kong as an exchange-traded fund market maker. In 2013, he decided to use his powers for good instead, and launched BitMEX with two industry friends.
What’s Interesting About BitMex
BitMEX is kind of different to most other Bitcoin exchanges, with its leveraged derivatives focus. Hayes explains why he chose that path, why he incorporated his company in the Seychelles, and why he doesn’t want to handle fiat accounts.
Hayes also shares his thoughts on other digital currencies like ether, Ethereum Classic, litecoin, and other less-common ones like Lisk and the still-not-launched Zcash. He’s interested in Zcash’s October start and the trading opportunities it offers.
If you’re interested in how trading platforms handle market-making and security, listen on. Taking lessons from the recent Bitfinex debacle, Hayes describes his own model for managing users’ profits and losses, and the platform’s failsafe measures against bugs and anomalies.
BitMEX’s security model is interesting and worth hearing more about. If users have to choose between security and speed, maybe it’s better to go with security. Hayes also explains why using third-party solutions for transaction-signing and security isn’t his preference, and why BitMex avoids hot-wallets as much as possible.
A Reminder That China is Important
“The whole world needs to recognize China trades over 70% of bitcoin volume, and it’s probably going to stay that way for a while,” Hayes says, pointing out that a holiday period in China (like last week) sees Bitcoin trading volumes fall markedly.
Hayes discusses the issues BitMEX faces in serving both Chinese and non-Chinese customers, and the importance of trust in these markets.
If you’re fascinated by what it’s like behind the scenes at a major Bitcoin trading platform, subscribe now. You’ll hear Knight and Hayes also talk about high leverage — when dealing with large losses, a volatile market and deposits in Bitcoin-only, it’s very different to running a mainstream and highly-regulated fiat currency platform.
And 50x leverage, he says, may not be enough. As people get used to these kinds of products, prepare for much more, Hayes says.
Hoping to get the jump on that demand, Hayes noted, “We are pleased to announce that 100x leverage has returned to the Bitcoin / USD, Symbol: XBTUSD, perpetual swap.”
Arthur Hayes is also doing an AMA session on the Bitcoin.com forums today. If you have any other questions, head over there and ask away!
You can check out the full episode here.
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