HiveEx.com launches OTC platform for high-volume cryptocurrency trading
Launched by finder.com.au co-founders Fred Schebesta & Frank Restuccia in February, the platform has already processed a volume of over $2 million.
HiveEx.com, a new over-the-counter cryptocurrency platform, has launched in globally and aims to solve problems of liquidity and slippage for traders who deal in large quantities. The platform allows users to trade upwards of $50,000 at a set rate. Most trades are conducted in bitcoin (BTC), Ether (ETH) and Ripple (XRP), with fiat support for AUD, GBP and USD. Altcoins are sometimes listed on the platform as well, with new coins such as Wanchain (WAN), being available before landing on public exchanges.
Fred Schebesta, co-founder of finder.com.au, headed up the platform's launch with a small team after being frustrated by the difficulty of setting up large trades on conventional exchanges, which are not optimised to handle large singular transactions. The Cryptocurrency Exchange Landscape Report released by HiveEx.com today, supports this claim. The report uses a case study to demonstrate that a single $400,000 trade on one of the highest volume exchanges in Australia would have resulted in slippage of over $7,000 and in the trade being split over 46 individual transactions as well as fees.
HiveEx.com solves the issue of slippage by offering customers one price for a single buy-order. Traders using conventional exchanges to trade large amounts will normally have to submit an order to the orderbook and wait for it to be filled. When dealing with large amounts, it is very unlikely the buyer will have their whole order completed for a single price. Instead, their purchase will be spread over several smaller orders, with the price of each order often increasing. The result is known as slippage since the price has slipped from the original starting point. For high-volume traders, these costs stack up.
The OTC platform hopes to make an impact as a trusted hub for high-volume trading by implementing a stricter than average know-your-customer process (KYC) to ensure only legitimate traders are able to use the platform. A stricter KYC procedure was a voluntary choice for HiveEx, which is also in the process of registering with AUSTRAC to increase transparency and ensure best practice.
Another pain point for high-volume traders is that most exchanges have limits on deposits, withdrawals and confirmation times. For instance, one popular Australian exchange limits users to deposits of $2000 until their limit is raised to $10,000. HiveEx.com is able to service large transactions with a quick turnaround by using liquidity providers outside of exchanges.
In the past 3 years, the number of cryptocurrency exchanges has grown from 70 to 190, a 171% growth, which, when looked at alongside trade volume, is clearly a product of consumer demand. In March 2016, major exchanges processed trades equalling $27.8 million per day. In less than two years, that number increased to a staggering $6.95 billion by December 2017.
Disclosure: At the time of writing, the author holds ICX, AION, WAN, LINK, QASH, NEO and XMR.
- SEC crackdown on Binance, Kraken – What it means for Aussie investors
- Sam Bankman-Fried found guilty – what it means for Australian FTX victims
- Bitcoin’s price soars over 10% on ETF rumours – here’s why
- New regulations for Aussie crypto exchanges: What it means for investors
- Sam Bankman-Fried’s FTX trial starts tomorrow – what it means for FTX customers