BRIDGING THE CRYPTO GAP
BTSE aims to take the trading of cryptocurrency into the future.
Ever since ‘The Year of The Bitcoin’ in 2013, the buzz around cryptocurrencies has yet to dissipate. Some cynics may still believe it to be a passing fad, but the writing on the wall is becoming increasingly clear: the era of truly digital assets is finally here. But while the technology may be ready, mass adoption is still largely at a nascent stage owing to technical complexity, lack of regulation in the space, and immature financial infrastructure.
Following Bitcoin’s emergence as an alternative to fiat currencies, a number of companies developed tech solutions to bridge these gaps and ease the transition from traditional to digital finance. One such solution is Bitcoin and Securities Exchange (BTSE), a multi-currency digital assets exchange and derivatives platform that aims to be a one-stop bridge to the gap between traditional fiat markets and the world of digital assets.
A Drive To Innovate
“We are moving to an era of technological and digital advancement, and it is inevitable that all future assets will be digitised,” says Jonathan Leong, CEO of BTSE. A coder since the age of 15, Jonathan has always been passionate about problem solving and considers himself an engineer at heart who is driven to make things work better. This is evident from his dropping out of university at the age of 22 to dedicate himself to his first project. Jonathan and his partner spent close to 16 hours a day coding the infrastructure for his platform, but by the time the platform launched, it could not match up to its competitors. Refusing to give up, Jonathan spent the next three years testing different strategies and campaigns to beat his competitors at the game. “It takes patience and tenacity to build and grow a venture,” he says. “As long as there is sound logic behind the choice to enter a certain industry, the project is worth pursuing.”
Today, Jonathan has more than 20 years of experience developing high performance, mission critical systems. His deep insight into the mechanics of financial institutions has led him to build a number of successful business ventures, of which BTSE is the latest.
The Exchange Of The Future
While Bitcoin has been in existence for the past decade or so, practical usage of it as a currency is still extremely inconvenient for a vast majority of people. Born out of a need to make Bitcoin accessible to the public, BTSE was envisioned as a vertical within a suite of financial services that would ease entry into the Bitcoin ecosystem. The platform would facilitate the growth and progress of Bitcoin by making its usage a better experience.
“Liquidity is the key driver behind an exchange. In order to achieve high liquidity and attract volume, a system needs to be built to support high frequency trading. Existing cryptocurrency exchanges were built using out-of-the-box generic software that was incapable of delivering the performance required by traditional financial markets,” Jonathan shares.
Compared to others, BTSE is the world’s first exchange that provides a multi-currency spot and multi-asset collateral system for futures trading. It features a revolutionary Order Book matching engine that runs in memory without a database, enabling sub-millisecond transactions that significantly reduce the risk of system overloads. BTSE can process in excess of 1 million order requests per second and its horizontal scaling model also allows for upgrades with near zero downtime. Additionally, the entire exchange is self-hosted, granting it significant advantages in security and performance.
Another key factor is user friendliness – BTSE offers standard institutional-grade trading expected by professional traders, allowing up to 100 times leverage, unlimited daily withdrawals and multiple SWIFT transfer options. At the same time, its simple user interface, BTSE Academy trading tutorials, free sandbox-like testnet, and a low minimum futures contract of 0.001 BTC allow it to appeal to traders of all levels. In addition, BTSE’s multi-currency platform allows it to attract and cater to an expanded global user base.
Compared to its competitors, BTSE combines the robustness and security of an institutional-grade exchange with the most flexible trading options in the cryptocurrency space.
Growing By Leaps And Bounds
BTSE was launched in 2018, with the founding team comprising professionals handpicked by Jonathan from companies such as Goldman Sachs, CISCO, and IBM. This team was responsible for building the platform’s competitive edge over other exchanges, with each member having proven value to bring to the table. “By utilising this combined experience, we know how to manage all the multiple facets of an exchange ranging from customer support to treasury functions, risk management, and business operations,” says Jonathan.
Within its first year, BTSE was cash flow and EBIDTA positive, a rare feat for most startups. Since then, the platform has expanded its user base by conducting community-oriented events such as trading seminars and engagement programmes, and by strategically partnering with industry leading names such as Blockstream or Brave New Coin. In June 2019, the platform launched Futures 2.0, an innovative futures technology that is the first of its kind in the market. “Futures 2.0 are fully customisable futures contracts which allow our traders more flexibility than they would enjoy on any other exchanges,” says Jonathan. Cryptocurrency futures trading is becoming increasingly popular with the largest trading platforms reporting 30% quarterly user growth. Yet compared to the global futures market, it is still tiny with lots of room to grow. Since going to market in June 2019, BTSE has seen a continuous growth of up to 1,000 new registered users per day, with over 2,000 regular daily active users and trading value of US$100 million per day.
However, as with all exchange platforms, and particularly with cryptocurrency, trust is key. As a young exchange, BTSE faces the daunting task of earning its stripes and convincing traders to move from established exchanges to a new platform. Jonathan aims to work around this hurdle by adopting a transparent approach that involves direct and open communication with users, consistent service, and meaningful partnerships with established organisations. “We have been, and continuously strive to be, the exchange of choice for cryptocurrency traders,” he affirms.
Much of BTSE’s financial success also comes from deliberate foresight, as Jonathan explains, “We made sure not to rely on a single revenue stream for our exchange. Establishing a foundation that builds on several pillars is extremely crucial for a young venture, and as such, BTSE counts on several revenue streams.” Aside from trading fees, BTSE has an active OTC market, and offers lending services to customers. By the end of the year, the company aims to start mining Bitcoin through a comprehensive partnership with technology provider Blockstream, as well as launch a debit card offering.
BTSE is also in the process of implementing a purchasable utility token that can be used across the platform’s trading services. The tokens would provide various benefits to its holders, such as lower fees, tradability and staking capabilities, amongst other planned benefits. The funds raised through the sale of these tokens would go toward improving the overall BTSE ecosystem. “Using the Binance BNB token as a case study, we realised that the token would serve to drive adoption, retention and growth,” states Jonathan, referring to the evolution of Binance into the world’s largest cryptocurrency exchange. Jonathan adds that while the BTSE token could have been released earlier, it only made sense to do so once BTSE had already established a base of users, traction, and revenue. “We have committed 30% of monthly revenue from four independent revenue streams to a liquidity fund that will constantly buy back and burn tokens from the market. This then would increase scarcity while creating continuous buying pressure, thereby maintaining token value and allowing for appreciation,” he shares.
The Future Of BTSE
For the future, BTSE plans to add the ability to speculate on traditional financial products using digital assets. “We will also develop social trading features that allow users the ability to share their trading ideas and follow and copy trades from other users. The social platform will allow users to chat and discuss strategies with each other while earning passive income when their trade ideas are copied,” Jonathan reveals.
With around US$10 billion projected in daily trading volume for the global cryptocurrency futures market, BTSE hopes to achieve US$400 million in daily trading volumes within 12 months. However, this is only the beginning, Jonathan assures. “We are developing a suite of financial services that are lacking in the current digital asset ecosystem in contrast to traditional finance offerings. At BTSE, we are putting significant amount of efforts into very close communication with regulators to ensure that we are not just building, but also paving the way for the successful shift to the future global finance space.”
The BTSE management team comprises professionals from companies such as Goldman Sachs, Cisco and IBM. Left to right: Brian Wong, CPO and Co-Founder, Jonathan Leong, CEO and Co-Founder, and Joshua Soh, COO.
This article was first printed in MillionaireAsia Issue 54 - December 2019