Among features as our parent site, Forex Magnates is an Experts Section. The section is a forum for readers to ask questions to insiders of the forex industry related to marketing, technology, trading, business development, regulation and more. Recently added is a section devoted to bitcoins, featured Antony Lewis, Business Development at itBit.
Recent Q&A has touched the topics of bitcoin Volatility and exchange dynamics. A recent answer is Lewis’s takes on marketing to new clients, which is a key issue facing bitcoin exchanges due to the newness of digital currencies as well as an emergence of what seems like a new exchange launching every few days.
Below is Lewis’s most recent Expert post, first appearing on Forex Magnates yesterday.
What Strategies Do Bitcoin Exchanges Use For Marketing To New Clients?
Firstly you have to categorize your clients, and have a balance of different client types on the Bitcoin exchange so there is trading irrespective of price. There are natural buyers of Bitcoin (funds; Bitcoin “ATMs” or vending machines), and natural sellers (miners who generate Bitcoin and need to sell them to fund their equipment purchases; point of sale and payment processors who receive Bitcoin from customers and need to sell them for cash for the merchants).
Differences In Size And Location Necessitate Strategy
Also you have market makers, and day traders who react quickly to news and price action – their action is often correlated to the price action and they will generally exacerbate price moves. You will see corporate clients who need to convert irrespective of the price action – we call these players non-correlated and they add trading when the market would otherwise be quiet. There is also another dimension of size, ranging from individual traders, through aggregators who aggregate many individuals, through to large funds who invest a large amount at a time, and corporates who have different requirements.
Each type and size of client, and each geographic location needs a different strategy as their requirements and use cases are different. Understanding and getting to know your clients is the best strategy, and we find that building deep, long term, mutually beneficial relationships with good clients more rewarding than a scattergun approach.
