I agree , India is deciding its own rates currently and not depending on International rates, But that does not mean the spread between Buy and Sell has to be 10% or more ?
As for us , we make sure the spread is not more than 1% or at the max 2% , In fact , Customers on our exchange don't let that spread be more than 1-2%.
If customers are buying Bitcoin , they should be able to sell too at the market price. The problem here is something else , the reason why people don't want to purchase Bitcoin at market rate is , cause they then don't have a place to sell at the market rate as well.
For ex, If someone purchases coins at market rate , and he makes 2% profit out of the volatility , he cant get that profit out as most of the exchanges or buy/sell platforms are keeping a spread of 10% or more. How is that person supposed to make profit if he can't sell at the market price ?
What's happening here with most buy/sell platforms is, When prices go too down , they are not willing to sell coins at lower price , as they have purchased it at a higher price , so prices don't go down with these buy/sell platforms and people are not able to take advantage of lower prices as they are not able to get coins at that price. Similarly, when prices go too high , these buy/sell platforms are giving too bad sell rates as they don't want to buy coins at higher price.
This is why , I think customer created market is very important. Customers should decide the buy and sell prices. Its very basic math , if you are not trading with a broker/trader in between who is keeping their own margins too , Buyers and sellers will both get great prices as the middle man spread is no more there , hence making the spread limited to 1-2%.
As for LBC , people take advantage of new Bitcoin users joining in by giving them bad rates , as most of these newbies are not aware of other available exchanges in India who are giving market Buy & Sell rates.
Mohit Kalra
Coinsecure.in
You need to compare apples to apples and what you did is not the right comparision according to me.As for us , we make sure the spread is not more than 1% or at the max 2% , In fact , Customers on our exchange don't let that spread be more than 1-2%.
If customers are buying Bitcoin , they should be able to sell too at the market price. The problem here is something else , the reason why people don't want to purchase Bitcoin at market rate is , cause they then don't have a place to sell at the market rate as well.
For ex, If someone purchases coins at market rate , and he makes 2% profit out of the volatility , he cant get that profit out as most of the exchanges or buy/sell platforms are keeping a spread of 10% or more. How is that person supposed to make profit if he can't sell at the market price ?
What's happening here with most buy/sell platforms is, When prices go too down , they are not willing to sell coins at lower price , as they have purchased it at a higher price , so prices don't go down with these buy/sell platforms and people are not able to take advantage of lower prices as they are not able to get coins at that price. Similarly, when prices go too high , these buy/sell platforms are giving too bad sell rates as they don't want to buy coins at higher price.
This is why , I think customer created market is very important. Customers should decide the buy and sell prices. Its very basic math , if you are not trading with a broker/trader in between who is keeping their own margins too , Buyers and sellers will both get great prices as the middle man spread is no more there , hence making the spread limited to 1-2%.
As for LBC , people take advantage of new Bitcoin users joining in by giving them bad rates , as most of these newbies are not aware of other available exchanges in India who are giving market Buy & Sell rates.
Mohit Kalra
Coinsecure.in
Now you have some volumes. It was not that 1-2% spread just 3 months ago. I am not sure what exactly you mean when you say you are making sure - i thought it was always your customers who create it.
This is the screenshot i have from your website that is from 26th august where the spread was 15% in spite you were an exchange and not a trading platform.
I ofcourse know that at that point of time there were not enough buyers on your platform to bring the spread closer. Now when your volume increases, you will usually do not see such issues especially when your trade book is transparent. But for a trading platform, it always continues to exist in spite it is getting crazy volumes (just on one side).
You cannot compare your prices and spreads to unocoin or zebpay prices and spreads. You do not take risks of taking positions nor running out of liquidity but we do. when we take positions and prices runs low - we lose money but in contrary if the price goes up, then there are not enough buyers. on the other hand when liquidity issue happens, we sometimes solicit an external buyer or seller to whom we have to offer at discount so that we square-off.
If you wonder why the last traded price on your platform is significantly lower than international price, i would claim that it is because of trading platforms which are selling bitcoin for cheap as of now.
Anyway, good to see that you guys are having some volumes now a days and are joining hands in price discovery in India. For unbiased price discovery to happen, we still need a lot of volume on every trading platform and exchanges, and I am looking forward to those days
I was not hitting you or any other Buy/sell platforms directly, I was just explaining the reason of the spread, but now that you have mentioned all of this, Let me put some clarity on. I very clearly said , '' In fact our customers make sure the spread is not more than 1-2% ''. I think you should realise , that coinsecure went live on the 1st of Jan this year itself, so Ya, i agree, our volumes , rates and spreads were too bad in August as it had just been a few months for us, But I think Unocoin has been in the market for past 3 years ?
And I don't understand , If we do not take risk of keeping the liquidity ourselves, Is something wrong with that ?
I think too, there is a huge difference between traders and exchange runners. We simply survive on our brokerage fees and nothing else .
Can you explain me a bit , why is it that Unocoin has 1% fee , even after having margins on the rate itself ? Like you mentioned, you take the risk of providing the liquidity, why would you need another 1% on top of your margins ?
Will it matter , if you keep higher margins than 1% on your liquidity and give 0% fee ?
Definitely agree these overall volumes in India are not impressing me at all , and we all must get huge volumes all together
Mohit Kalra
Coinsecure.in
We are yet to hit out second anniversary next month. But what i was trying to tell is different. You guys and us are targeting different set of customers. When volumes are low, the spread will get higher. That volume low may occur directly on exchange or when volume is low on one of the sides for a trading platform.
Yes you guys do not run short of liquidity if all the orders you have are genuine orders. You are only changing hands for bitcoin and INR.
"We simply survive on our brokerage fees and nothing else ." - are you sure this is take care of all of your expenses including salaries and variable expenses ? If so, then it is time to celebrate - you are breaking even
1% is the transaction fee and the spread which keeps varying depending upon the buyers and sellers and the positions we have taken. We collect service tax on transaction fee but not on the spread. So we need them to be separate as one is constant and the other one is not. There were times when our spread was around 2-3% when volatility just 2 months ago. We will be back there very soon as well
I keep seeing china volumes which has comparable population - Indian volumes are just a fraction of them.
What makes you think our liquidity is not genuine ? Feel free to complete them orders anytime you wish. We are a complete transparent exchange , we allow users to see full depth of the order books as well as last completed trades too. I mean our API can give you all this data too, Its not possible to fake stuff if you have so much transparency.
No way , we are breaking even at this point of time. Obviously our fees is just 0.3% each side, we need at least 100 times the volume we have just to take care of our monthly expenses , also most of our high traders are on lesser fees , like 0.1%. So i don's see breaking even anytime soon , its still time left to celebrate, lets hope we all celebrate our success together
I completely agree with you , that fees is important as it makes you give service tax and keep the government happy :p
Hope the spreads are decreased in the near future, cause as a customer , I might not be happy with such huge spreads. Glad that ZebPay's spreads has become way better now, also i am seeing good rates on LBC as well. Even BTCXIndia's spreads are good , and sometimes better than ours.
Also, Is Unocoin allowing micro trades , like are users allowed to buy or sell for like 100 bucks and stuff or is there a minimum limit like what BTCXIndia has , which is 0.1 btc min order.
Yup , India's volumes are just a fraction of any global exchange currently. Its just a shame , as we have amazing population. I hope we make the situation in India soon like it is in China.
We all must work on getting some kind of regulations, so people who are scared to get into Bitcoin, can finally start using it.
Mohit Kalra
Coinsecure.in