Updated, Nov. 5, 2014 15:14 GMT: response from BTC.sx on order flows and leverage.
BTC.sx has partnered with Bitfinex to bring the exchange’s order book data to its trading platform, giving traders a third choice of venue for betting on bitcoin prices.
Two weeks ago, BTC.sx added itBit. Prior to that, Bitstamp prices were the single choice for traders.
The move is being touted as giving traders access to greater liquidity.
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The only currency transacted on BTC.sx is bitcoin. Traders can bet on leveraged CFD-like instruments tracking prices from the three exchanges. The “sell” and “buy” values flow directly from the top level quotes of their respective exchanges. This differs slightly from other bitcoin CFD offerings, which add a fixed spread to the traded price and apply an expiry date on positions.
The announcement comes shortly after Bitfinex announced plans to help fuel its own growth. It partnered with white label solution provider AlphaPoint to enhance performance and increase capacity.
The Finextra report says that “Bitfinex users will see further liquidity improvements with the arrival of traders from BTC.sx”, implying that some or all trades will actually flow through to the exchange. This would eliminate BTC.sx exposure to losses as a counterparty, but would also limit their potential “winnings”. If true, this also opens up the question of who is supplying margin- BTC.sx, Bitfinex, or both?
BTC.sx has informed DC Magnates that positions taken for all three instruments are in fact routed to their respective exchanges, where one should observe their order executed. They also confirmed that they are the sole suppliers of leverage for positions taken on their platform.