NewsBTC: Despite being a famous company in Bitcoin space, you have remained quite calm on Bitcoin block size issue? How do you see the current scenario?
Gavin: My view on this is very different to that of Brian Armstrong. I believe that, providing the timetable is maintained, the proposal by the core developers to introduce Segregated Witness followed by a blocksize increase in 2017 after extensive testing is the correct approach.
Brian Armstrong’s view is based on how his company uses bitcoin. They need to complete a large number of what can be very small transactions. He is less concerned about bitcoin as a store of value, for him it’s all about the transaction fee. His willingness to propose rapid change, with what I and many others consider inadequate time for testing might keep transaction throughput cheap and efficient, but I feel is imprudent.
First Global Credit, on the other hand, is striving to build a capital market around digital currencies in general and bitcoin in particular. Therefore, we prefer an approach that ensures the hard fork is carefully tested and adequate time is taken to ensure the change doesn’t have unexpected consequences that adversely impact bitcoin as a store of value – we believe the proposal by the Core team meets this objective.
Did you notice any funny volume fluctuations on your platform during the recent FUD against Bitcoin?
One thing that has been a constant in the Bitcoin space is the disinformation spread by the mainstream media about its viability. I think it’s a shame that some within the community have now started adopting the same tactics to promote their own agenda but I guess that’s to be expected when corporates start to get involved. We did not notice any negative impact on our business over the past few weeks – yes transactions have been marginally more expensive to process but that’s a cost of doing business for us. Our focus remains as it always has been, on providing a platform where holders of bitcoin can earn a return on their capital in just the same way you can earn a return if you hold any fiat currency worldwide. Holding bitcoin should be no different.
How’s your venture turned out so far?
People that use our services have an advantage over other people looking to generate a return on bitcoins – the ability to trade bitcoin price movements while, at the same time, using that same capital to trade in the stocks and futures markets. This value proposition is allowing us to grow our trading volume by about 50% / quarter, something traditional brokers would love to match. In the last quarter of 2015 we achieved trading volume of over $4.5m in stock trading alone and Q1 of 2016 has already smashed through that level. By offering our customers direct access to the global stock and commodity markets we are able to achieve much tighter market spreads and higher volumes than simple CFD providers who make their money by trading against their customers. As an example, the mini SP futures contract trades on the CME usually with a spread of 0.25 between the bid and offer, this compares with a typical CFD provider that will charge 0.8 above and below the last price, over 6 times the bid/offer spread. With these numbers you can see why customers are moving across to our platform.
Perhaps, that is why you are adding new markets to the platform?
We have launched our futures trading products in the same way we initially launched stocks – with a limited selection of contracts. Initially, we have launched futures trading on Gold, Comex Copper, Light Crude, the SP and NASDAQ. As with stocks we will follow this with a rapid rollout of contracts, driven by customer demand. Next week we will be adding the VIX futures contract, 10 Year Treasury bond, T-Bill futures, Corn, and Soyabeans based on customer requests. This rapid rollout will continue over coming months.
What are FGC’s plans for the future?
We are putting the finishing touches on our new trading platform which will be released in the next 2 months. The platform will provide our customers with a wider range of products to trade and also better capabilities to manage and visualise their positions including charting. It’s a very exciting time for the company with new partnerships and a unique product pipeline that will keep us ahead of the competition in our particular niche of the digital currency ecosystem.
How would you describe the benefits of Bitcoin in stock trading markets?
With traditional currencies people are taught from an early age to make your money work for you. Nobody would dream of leaving a large amount of dollars under their mattress – but that’s exactly what they do with their digital currency holdings. We provide a service so people can make their digital currency work for them. All our accounts over 10BTC generate a 2% yield, even if they are being used for stock or futures trading. This alone makes it more attractive than conventional brokerage accounts that long ago stopped paying interest on margin balances. This, coupled with our direct access to the most liquid exchanges globally and our willingness to listen to what customers want make First Global the obvious choice for digital currency investors that are serious about their trading, who demand the best execution.