Chieh Liu – the CEO of derivatives trading platform Overbit – has an ambitious outlook for the platform over the coming years, with hopes of eventually taking on market leaders BitMEX.
Overbit launched at the start of 2019 and, according to Liu, it already has 50,000 registered users who are able to trade crypto, forex markets, and precious metals like gold.
Liu’s journey into crypto
Chieh Liu stumbled across Bitcoin and cryptocurrencies while studying computer science at the California State Polytechnic University.
“I was studying computer science. We heard about Bitcoin, so just for fun we bought a small amount. Then in 2017 I worked for a financial investment company that did overseas investments. I had several sales from Taiwan and my partner was from Japan, so at that time we helped bring blockchain education into Japan and Taiwan,” he told Coin Rivet.
“At the beginning of ICOs we helped a lot of projects raise funds in Asia. After that we saw that ICOs are limited, so we thought what else can we do? Fortunately, my partner is in London, and they have been building traditional forex systems for decades. So we said let’s build this Overbit system, and two years later we are finally live.”
Much like its competitor BitMEX, Overbit has offices in Hong Kong and is registered and regulated in the Seychelles.
The exchange’s workforce currently consists of 30 staff based in Hong Kong, Japan, and London, with a strong focus on customer service and support.
“A lot of other platforms and their support teams are really not as active as they can be,” Liu added.
“So we have tried to put a lot of manpower into the support team. We hope to implement various support languages throughout 2019.”
Indices on the horizon
Overbit currently offers four cryptocurrency trading pairs including XBT/USD, ETH/XBT, XRP/XBT, and BCH/XBT. Users also have the functionality to trade three major forex markets and gold.
Liu revealed that while more crypto and forex trading pairs will eventually be listed, the team is keen to add indices pending approval from regulators.
He added: “We would like to get more crypto listed. However, with the market cap of different altcoins, you have to list the top coins. We also want to add more pairs of forex, of course. As for indices, this is something we are really interested in. However, the regulations are complicated, so it will take some time.
“As far as next year, we hope that we can get indices into the platform, and we are also trying to create a crypto index in the platform as well. This will be for people who don’t know what to buy or sell. We will provide a portfolio index for them to play with.”
Taking on BitMEX
In terms of daily trade volume, BitMEX is a market leader, regularly exceeding $5 billion in volume and $500 million in open interest.
As a cryptocurrency derivatives exchange, Overbit – which offers up to 50x leverage on crypto and 500x on forex – views BitMEX as its “main competitor”.
However, BitMEX’s rise to the top has not come without issues. The exchange has fallen under intense scrutiny due to the infamous “system overload” that stops users entering or exiting trades during volatile market swings.
“This [overload issue] is what we’ve heard from a lot of people. Personally, I met Arthur in Hong Kong – he’s a really nice guy,” Liu said.
“They are targeting more professional traders – they have open API to connect different platforms. We are focused more on retail traders, but we will offer open API in the future.”
BitMEX offers markets globally with the exception of the United States. Overbit seems to be taking the same approach, with trading currently open in China, Japan, Korea, and England.
“We are targeting various regions, but we cannot have customers in the US. So far we have Chinese, Japanese, Korean, and English in our platform. We will be adding more European countries as well as Vietnamese, Russian, and Thai. So we are targeting globally,” he added.
Tier points and rewards system
One of Overbit’s features that encourages and incentivises traders is its tier points and rewards system. Users will receive rewards through affiliate links and competitions.
These rewards will be unlocked via tier points, which will be gained through trading on the platform. Users will earn 10 tier points for every 1 XBT traded, regardless of leverage. Once 1000 tier points are earned, users will be able to withdraw or trade with their earned rewards.
On his motive behind adding the tier points feature, Liu said: “When you travel a lot, you get mileage points and rewards systems. That is the purpose to make you stick with one airline. So this is what we’re trying to do to encourage people to trade on one platform. It’s a really simple concept, it’s just that no one has done it for an exchange. Binance issues its own tokens and you can use the tokens for lower fees, but we wanted to try a different way.”
Experience so far
While the launch of Overbit has been relatively seamless, one of the concerns raised has been the spread in price between market buys and sells. Currently, there is roughly a $20 spread on either side of the XBT/USD book. This means that if price is at $7,800, sell orders would be executed at $7,780 and buy orders would be filled at $7,820.
However, Liu has a solution to the high spread.
“Depending on the liquidity, the spread will change,” he said.
“People are saying, ‘you have a high spread, can you lower it down?’ We are thinking about it, but it comes from liquidity. In future, with the tier points system, you may be able to pay for a period of smaller spread. For example, you could buy one month of a lower spread with tier points.”
Liu then candidly admitted that the marketing strategy his exchange explored during launch wasn’t as beneficial as it could’ve been.
“We did a wrong strategy in the beginning. We literally gave free Bitcoin to everyone. But we are now on the right track, even though we’re behind expectations. We have 50,000 registered users, but only 30 to 40 percent of those are active traders.”
BitMEX’s overload issue is still fresh in Liu’s mind, so much so that he revealed his “development team are still working on making the system really smooth and perfect”.
He added: “BitMEX has the problem when people try to trade at the same time – we have that problem too in some respects. We want to see how we can fix this. This is the main goal this year.”
The cryptocurrency market is known as being highly volatile with wild swings in either direction. The recent uptick in the market has seen Bitcoin rise from $3,150 to $9,000 in a matter of months, but Liu is expecting “slow growth” as opposed to it “rising to $20k” in the next few months.
Much has been spoken about the influx of institutional investors into the cryptocurrency market in 2019, and while Overbit is focusing primarily on retail traders, it wants “to target institutional traders eventually”.
“Once we have open API and release it, we have to talk to different partners to bring liquidity. Once everything is ready, we will cater to institutions,” Liu added.
Liu hopes to expand the Overbit brand over the coming months. He will be attending a conference in Thailand in three weeks as well as the Barcelona Trading Conference in July.
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Disclaimer: We do not give advice on financial products.