In 2019, Bitcoin recorded an eye-catching 94.57% APR, leading all asset classes in the world. The cryptocurrency market managed to shock the global financial industry one more time in its own way. Despite the cheers and applause by the ‘crypto generation’, the total size of cryptocurrency markets is still less than 1/5 of the market cap of AAPL and has a long way to go to join the mainstream trading party. The one that is most likely to lead the way is cryptocurrency derivatives. While Bitmex, Deribit, OKEX, and institutions like Bakkt or CME are busy defining the marketplace, Oceania Financial Capital, an Australian liquidity provider, is striving to take the crown in the future cryptocurrency CTA (commodity trading advisor) industry.
MTA – The Cryptocurrency Version ‘CTA’
Oceania Financial Capital (“OFC”）was established in 2018, in Sydney, Australia, is among the first regulated Digital Currency providers with AUSTRAC, the Australian regulating body of cryptocurrencies. Ranking the top 10 market maker, OFC supports the liquidity of over 20 exchanges around the world OFC with top-level trading accounts.
In 2019, as the underlying logic of the market swiftly shifted away from new asset discovery (ICO/IEO), OFC started to get involved in the margin trading management market. And the ambition, fairly simple, was to replicate the whole CTA sector in cryptocurrency. OFC identified the major pain point of the derivative market as such: a Too high barrier to entry. Due to the limitation of size and legal uncertainty for most of the traditional financial institutions, a cryptocurrency market is a place where 99% of the share is dominated by retail investors. Even the majority of the ‘whales’, as we know, are individuals. Although you can make money regardless of a bearish or bullish market, it is too volatile for most new players. 90% of new users make a loss within the first month of registration on a trading platform, which effectively stops them from trading further. To rectify this, OFC adopted the features worked in CTA and forex: Bot trading and insurance, and launched the Margin Trading Advisor (MTA) App.
Disruptor Of Copy Trading: Insurance + Perpetuals
Before MTA App, the most prevalent choice for retail users is copy trading platforms, like Zulutrade or eToro or some newer API copy trading ones. These platforms allow newer investors to copy a trader’s buying or selling by paying a small commission. However, OFC believes such a model has major flaws: first, a trader can lie about his wining rate by not stopping loss. Second, the platforms have no control over traders. You can easily lose all your money with one wrong bet. Needless to mention some traders viciously trade at high frequency for fee commission if API copy trading.
What OFC envisions is a real peace-of-mind trading model: Allow users to put down money and earn from OFC’s trades while getting insurance protection when things go wrong. To achieve these, OFC enables the following features in MTA App:
AI Bot Execution
One big killer of profit is human errors, which include physical errors (eg. fat finger) and emotional errors (FOMO and FUD). Human errors are inevitable so to avoid them, OFC developed a trading intelligence bot that is powered by OFC’s powerful CTA strategy generation engine to capture TA signals (i.e. a clear trend) and execute trading automatically. So users of MTA can enjoy automatic trading without any professional skills or even manual intervention at all.
Borrowed from Binance, the word ‘SAFU’ refers to a unique insurance policy in OFC MTA. When opening a position, 20% of the fund will be marked as the SAFU insurance allowance. When a loss event occurs, a SAFU payout will be triggered to cover the user’s loss. When a profit and the closing balance exceeds the opening balance (after SAFU allowance), the SAFU allowance will be credited from the profit as SAFU premium.
Low Margin and Enforced Stop Loss/Profit
To prevent large volatility and sudden drawdowns, MTA will not allow any margin over 20x. A low stop loss/profit point is enforced which is +30% and -20% with margin in every trade. This also adds to OFC’s already strong risk control to ensure the aggregate risk coefficient never exceeds the SAFU coverage.
OFC shares its institutional level facilities with the users, including low latency gateway and market maker low fee accounts. So OFC would not be able to collect any fee commission from any trading platforms from users’ funds to erase the potential conflict of interests
OFC is the first and only trading intelligence in the market that can predict the market and gives buy and sell advice visually to its users. By doing this, OFC aims to achieve full transparency of its strategy so the users’ can monitor and have peace of mind. So far, Forecast Bot is able to achieve a 90%+ accuracy.
OFC would only trade in 5 major derivative exchanges: Bitmex, Deribit, OKEX, Binance, and FTX. And OFC only trades perpetual swaps to avoid high premium and volatility.
You can find a trading knowledge base called ‘OFC Academy’ offered as an in-app feature. OFC does not want to keep it secret but share the knowledge with its users so more people can join and start trading.
The Vision: Cryptocurrencies go mainstream by 2035
As the Bitcoin halving event is near, an optimistic mentality can be felt among the crypto crowds. Unlike the previous two halving events, more people are now engaging it through the derivative market. For OFC, the launch of MTA was at the right timing as the cryptocurrency market structure becomes more mature, the lowered barrier by MTA is expected to attract 10 times more funds than in 2017. It would not be too ambitious to imagine the gap between the market size of cryptocurrency and forex to be closed at an increasing pace. OFC would then become, as described in their advertisement, many steps closer to realizing its ultimate vision: make cryptocurrency mainstream by 2035.