First Global Credit is a trading platform designed to allow users with bitcoins the ability to trade international markets. Unlike conventional systems in which these users would need to sell their bitcoins in order to take the market holding positions, FGC instead uses the funds as collateral. In this way a user can deposit their funds in the FGC system, then enjoy a five times leveraged buying power within the markets represented on the platform.
First Global Credit has over 50 types of markets and commodities represented within their system for users to purchase trading positions in. These range from established fixtures like gold, to the big names in the stock market world like a NASDAQ fund. The bitcoins the user has deposited in the system allows them to purchase stock positions in these represented markets.
The fact that the user has not sold their bitcoins in order to take a stock position in a market means that if the price of Bitcoin goes up against the dollar whilst the user is taking part in the FGC platform, then they can still benefit from the rising price of the bitcoin.
Another feature available to the full traders within the platform is the option for a currency switch. This means that users have the option to purchase a position in BTC but then translate that sum into the equivalent USD figure. This can hedge users against a possible drop in the value of bitcoin, as the user can later trade back into bitcoin at a better ratio.
The trading system itself is straightforward with screens offering quick buy and sell options, along with more advanced purchasing order alternatives.
The concept behind FGC is to allow Bitcoin users a platform in which they can earn more bitcoins through trading while also holding onto their bitcoins in the longer term. If the user is able to play the markets well, they could be in line for a double pay out.
The day trading environment itself is obviously a risky one though with many individuals feeling perhaps intimidated by the difficulties and risks it represents. For those wishing to get their eye in on the prospect first, there is also a “paper trading” account option available. This allows users to play the markets without first risking their own funds.
Headquartered in Geneva, Switzerland, First Global Credit has a technical operations base in Guildford, UK, and a customer service hub in Singapore. FGC was founded in 2014
Commission fees start at 0.1% for active trader accounts, or 1.45% for the smaller investor service. There are finance fees for holding positions over night of 0.1% for the former account and 2% for the latter. Dividends on long hold positions are paid out minus a 30% US withholding tax.
CoinTelegraph: First Global Credit allows users to day-trade global markets using bitcoin as collateral; have you had much reaction from more traditional trading set ups to you supporting a cryptocurrency?
First Global Credit: We have received very positive feedback, which has been really encouraging. Unlike traditional banks that see cryptocurrency as a threat to their profits due to decreased transaction fees it seems that the investment business see the opportunities in digital currency and are actively looking for ways they can become involved.
We are especially encouraged by the discussion we have entered into with hedge funds that are interested in trading a hybrid bitcoin/stock product to overcome restrictions in their trading mandates.
CT: Day trading is a lot more energetic and involving than some people might imagine. How accessible do you think market trading is for someone who hasn't tried it before?
FGC: One thing we’ve learned from our experience with traditional markets is there is no clear profile that marks a profitable trader from an unprofitable one or any given personality that will enjoy the pressure of actively trading in markets. The purpose of our paper trading platform and our trading competition is to allow people to see if active trading suits their temperament and their lifestyle without them risking a single satoshi of their own money.
CT: The currency switch feature allows users to automatically hold their positions in a fiat currency, do you think cryptocurrencies will ever become stable enough for this not to be necessary?
FGC: This question should best be answered in two parts. Do I believe cryptocurrencies will become more stable? Without doubt this will be the case. Within our team we liken bitcoin to the US dollar at the end of the 19th Century. It was a fledgling currency with very little international support and huge volatility. Over time, the volatility lessened and non US holders of the currency became more willing to retain ownership rather than just use it when absolutely necessary.
Bitcoin is at that same stage, most merchants who transact business in bitcoin exchange the currency for their own Fiat currency as soon as they possibly can – we believe this situation will change, so much so that one of the driving visions is to provide people with bitcoin investment opportunities, allowing them to hold bitcoin and make investments rather than cash those bitcoins in to take positions in other things.
The second half of the question, will bitcoin become stable enough to remove the need to hedge the risk? We believe that bitcoins are destined to become a fully-fledged investment currency with its own capital market and Investment Opportunities; part of this will be the continued need investors will have to hedge their currency exposure.
This is a common practice in the Fiat currency markets where an investor holds and wants to continue to hold investments in a particular currency but, short term, wants to hedge against predicted downside move. They will take out a short term hedge until the storm clouds have passed and then re-establish their original exposure; all the while maintaining their original investment. This capability, we believe, will encourage adoption of bitcoin, not discourage it, because it provides a simple way to protect against short term risk. [But the base currency on our system remains bitcoin.]
CT: Security is always a big concern for cryptocurrency platforms, what steps has First Global Credit taken to protect users' funds?
FGC: We are constantly adapting our security as new threats become apparent but we have some key processes in place that protect client funds from a breach of First Global Credit’s security
We don’t use online hot wallets at all. While having a manual step in place does slow down the process of deposit and withdrawal but it provides an added layer of security to our client funds.
All funds are held in a multi-sig offline wallet. All withdrawal requests must be signed first by our system - this is triggered using two-factor authentication by the client. The transaction must then be signed by a Senior member of our operations team. Finally a member of our Risk team must sign the transaction before publishing the transaction onto the blockchain. At each stage checks are made to verify that the withdrawal request is genuine.
Funds must be returned to the wallet address that made the original deposit. Sometimes we recognize this is not convenient, in this instance further checks will be required to verify identity.
No wallet holds significant numbers of bitcoins. When a wallet increases above a designated threshold the funds are split across 2 new holding wallets with the original wallet emptied. This dynamic movement through wallets helps ensure that no single wallet can be identified as the source of significant funds.
CT: It's exciting to hear about the new competition to win 10BTC of trading power on the First Global Credit platform, what's the response been like so far?
FGC: This is the second time we have run this competition and the first competition had an awesome response. In the office we had great fun watching people’s different trading styles and we started routing for the plucky individuals that really put thought and effort into their strategies. There are a lot of different things people can trade and they can go long or short. I’ve had a lot of excitement from guys about the Porsche Boxster which they can ask for at Level 11, after the winner has traded for a while. I live in fear that the winner will be a 10 year old kid. But we do clearly say on the website that part of the arrangement is subject to legal limitations!
CT: What will users have to do in order to win the competition?
FGC: Well we had 100’s competing last time around and I think CT readers will be keen to play so you are going to have to really think and actively play to win. But I would definitely say, DON’T GIVE UP! Some people seem to have a few trades go against them and stop trading. But that is the thing about being a trader is we are tough and persevere! And hey if you get something wrong, as long as you learn from it, then you did get something out of the experience. There are ALWAYS opportunities in the markets.
CT: Any hot market advice to get newcomers started on their first trades?
FGC: We give you 100 ‘play’ Bitcoins in the competition. But you have 5 times leverage. That’s a lot of buying (or selling) power! But remember, aggressive leveraging can work for you and you can make big money on a good decision but it can also work against you. And learn absolutely everything you
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