COO of TEAMZ will host an AMA on WeChat with Ben Radclyffe, Commercial Director of BitMex. This will be a written AMA taking place in ChainTalk official WeChat groups and will be live-streamed so everyone can watch.
Ben is the Commercial Director for BitMEX, one of the fastest growing and successful trading platforms in the cryptocurrency and fintech space.
Prior to joining BitMEX, Ben was Managing Director for Tower Research, a trading and technology company that has built some of the fastest, most sophisticated electronic trading platforms in the world.
He has previously held roles at Deutsche Bank and UBS in three continents, has been involved in electronic trading for almost 20 years and holds a degree in Computer Science.
Q. Please simply introduce you and BitMEX.
My name is Ben Radclyﬀe and I’m the Commercial Director for the HDR Group, the ﬁrm that operates the BitMEX exchange. BitMEX is one of the oldest and largest crypto derivatives exchanges, founded in 2014 and home to the original Bitcoin Perpetual Swap.
Q. We know that BitMEX’s transaction volume is very high, can you list which highlights make BitMEX very attractive to retail investors?
Our focus has always been on user experience, ease of access, a level playing ﬁeld and most of all, liquidity. The BitMEX web app has long been considered a market leader for trading experience, but the ability for our users to compete on a level playing ﬁeld, regardless of their size or capital is really what helped us cement our position with our customers. Access to leverage usually reserved for corporate accounts, equal access APIs that don’t preference things like co-location or special connections and standardized incentives for market makers all help to allow even the smallest traders to compete.
This approach means that the available liquidity on the BitMEX platform is almost always the deepest in the market – users can execute larger trades without moving the price. The eﬀect of that liquidity is that the overall cost of trading on BitMEX is far lower with us than on other exchanges, even though our fees are sometimes higher.
Q. Where are BitMEX users mainly distributed? Which regions should be focused on next?
One of the things I’ve discovered since joining the platform a few months ago is that we have an incredibly geographically diverse user base and it’s been really encouraging to see that diversity grow over time as adoption of Bitcoin and other crypto assets continue to spread around the world.
We keep a close eye on adoption and acceptance in different countries and jurisdictions and try to plug any product gaps we may have that a growing user base in a particular place may need – language support, customer service support hours and so on, as well as partnering with 3rd parties on the ground who are better placed to help us understand and serve the local customer base.
Q. Chinese traders like leverage, future trading and risk investment. Presumably BitMEX has a big market in China? What is the proportion of BitMEX’s Chinese users? At the same time, there are mainstream exchange competitors such as Binance, Huobi, and OKEx. What is BitMEX’s plan in China?
As a global platform, we don’t tend to think about speciﬁc geographies or client segments, but I will say that we’ve tried to ask for and listen to feedback from as many of our clients as we can to help drive the platform forward and deliver products and improvements that they’re asking for, regardless of location. One of the demands we’ve been focusing on recently has been to add new contracts that allow our user base to risk manage a broader range of cryptocurrencies. In the last two months, we’ve responded with contracts like our ETHUSD quanto contract and the BCHUSD perpetual swap. There’s a number of others lined up for the remainder of 2020 along with platform features and technical upgrades as well.
Q. What are the users of BitMEX? Retail investors or institutional investors?
As with most successful trading venues, we have a healthy mix of diverse user types. As you can imagine, this mix has changed over time as the Crypto trading community and industry has evolved and we ﬁnd ourselves servicing a far more sophisticated and demanding client base now than we ever have done.
We’re absolutely committed to continuing to service our core customers and those that helped us build the platform to where it is today and it’s probably a good time to say a big thank you to all of them!
Q. I see many traditional investment institutions in North America. Traditional investors are buying bitcoin. As a derivative crypto exchange, will you expect these traditional investors become your main customers?
As Bitcoin continues to emerge as an asset class of its own, I expect the diversity of investor types to grow with it. We can see some of the tides changing, especially in the current global economic climate, but many people have made the call that Institutional Money is just around the corner, only to have been proven wrong.
An obvious challenge for the industry is to continue to oﬀer fair and equal access in a way that remains compliant with shifting regulation.
However, it’s worth noting that many of the traditional investors you mention are actually just large collections of retail investor money grouped in a single place – pension funds, ETF managers, etc – so the underlying investor remains the same.
Q. Faced with institutional investors, will the next expansion plan more B2B business? Like Huobi expand their Huobi mining pool, etc.
There’s a temptation to try and be all things to all people, but we’ve positioned ourselves as an exchange that excels at simplifying complex ﬁnancial products and building liquid markets around them. Our preference is to partner with others who are better placed, better skilled and better resourced to oﬀer out some of the supporting services the industry needs in order to grow – Prime Brokerage services, custody of digital assets and even some technical solutions like charting.
Having said that, the crypto industry is still in its infancy, so many of these services don’t yet exist. Exchanges like us are well placed (and capitalised) to help ﬁll some of the holes while the industry catches up. We’ll continue to listen to what our clients want and where appropriate, build services around them.
Q. In terms of platform security, how does BitMEX do it? Tell us about it.
It’s central to everything we do. The platform was built with the security of users’ funds at its core and we’ve never moved away from that philosophy to cut corners.
Our internal security team has been sourced from global, top tier tech and financial services companies and have brought with them a wealth of experience to make BitMEX leaders in the space.
We work to ensure that security best practice is upheld, extremely high standards are met and our goal is always to ensure we far EXCEED the benchmark set by the industry. We work closely with teams across many other exchanges, researchers and law enforcement to ensure we are continually abreast and ahead of emerging threats to the business, our clients and technology stack.
Q. BitMEX is one of the ﬁrst derivative crypto exchanges, and since last year many spot trading exchanges have launched their derivatives trading function, how do you see this situation? Who are your competitors? Compared with them, what are the advantages of BitMEX?
The cryptocurrency market is growing and maturing rapidly, so it’s no surprise that competition is increasing too – in fact, I’d say that competition it’s generally positive for traders, investors and exchanges alike and will help push the industry forward, so I welcome it.
BitMEX is an innovator in the space, and we put huge effort into maintaining that position. As stated earlier, BitMEX remains the most liquid exchange, and that means the overall cost of trading on the BitMEX platform is far lower than other exchanges. Our focus is on providing fair and equal access to our trading platform.
Q. Recently, BitMEX withdrew from a market like Japan due to compliance issues. Can you share with us any strategies and plans for the next regulation and re-entry to markets that have already withdrawn? At this moment, which counties are BitMEX doing for compliance?
Allow me to clarify – the reason we exited the Japanese market was to stay compliant with new JFSA (the Japanese Financial Services Agency) regulations that came into eﬀect at the start of May of this year. We have a positive relationship with the JFSA, and will continue our dialogue with them as the regulatory landscape in Japan continues to evolve. Japan has been at the centre of much of Bitcoin’s evolution and without the Japanese cryptocurrency community, the industry wouldn’t be in the position it is today.
Q. Currently, mainstream exchanges are still dominated by centralized exchanges. So will BitMEX go in the direction of a centralized exchange? Do you think that in the future, eventually, centralized exchanges will be replaced by decentralized exchanges?
The decentralized concept is still new and people are learning what it means for their own businesses. As with any emergent technology, there have been some high proﬁle teething problems, though the people involved in building out these platforms have been quick to react with improvements.
We have no plans to adopt a decentralized model at the moment, but never say never – we’ll keep an eye on the trend, listen to what our customers are asking for and continue to evolve.
Q. Do you have any suggestions and advice for investors who are ready to start trading?
Absolutely! Firstly, educate yourself as much as you can. Ensure you understand the products, services and those providing the services that you’re using and don’t assume that things that look the same all work the same way. There are at least 400 diﬀerent crypto currency spot and derivative exchanges, all subtly diﬀerent, so picking one to invest with is an important choice. My advice would be to choose an exchange with critical mass, resources, high levels of security and a good reputation built over time.
Secondly, when you’re ready to invest in cryptocurrency derivatives, take time to understand the risks involved. Using a platform like BitMEX guarantees that you can’t lose more money than you post as margin, which is an additional protection over traditional markets, but concepts like Auto-Liquidation and Auto-Deleveraging are still important to research properly.
Thirdly, and this is true with all investing, make sure you diversify and invest responsibly.
Q. Taking this opportunity, at the end do you have any messages to our Chinese community?
I’d like to take the opportunity to thank all our users for helping BitMEX build into one of the dominant cryptocurrency derivatives exchanges in the world. We’re committed to continuing to build innovative, market deﬁning products that allow our customers to invest, risk manage and preserve their capital in a fair and transparent way. We’ll only be able to do that by listening to our customers and acting on their feedback, so I’d encourage anyone reading this to contact us with their ideas and asks so we can make the platform better for everyone.
Thanks again for inviting me to participate and I look forward to the next opportunity to engage with your community.