Hi twats,

Our business model is explained in our About page.

Trades are matched internally and Whaleclub operates as a hybrid market maker. This model has existed for a long time in the Forex world (see IG.com for an example, one of the largest and longest running brokers) known as CFD. We simply bring it to bitcoin.

It's a much more efficient and cost-efficient model than traditional exchanges because the cost of trading on Whaleclub is only the spread: there are no execution fees and your order is executed in full at the quoted price. On an orderbook exchange, the cost of one trade is the spread + slippage (due to lack of liquidity) + execution fee (average 0.25%).

This is why if you look at the Forex world you won't see any retail traders using an exchange. Traders use brokers and CFD providers for efficiency.

If you want to make a market you may still be better off on an exchange. For any other kind of trading, the CFD model is superior.

-Jeffrey Sacks
Whaleclub Customer Support