Vietnam’s Growing Bitcoin Sector Adds It’s First BTC Exchange With Leverage Options

Vietnam’s rapidly growing bitcoin scene adds the country’s first bitcoin exchange which offers traders leveraged trades, as they look to become the regional leader.

Since the Đổi Mới ("Renovation") economic reforms of 1986 Vietnam has liberalized much of its economy and has had a strong pattern of growth. Today the country has over 80 million people and has averaged 6 percent annual GDP growth in recent years. It is regarded as one of the fastest growing economies next to economic giants like India and China. In 2012 HSBC, one of the world’s largest banks and financial providers, predicted Vietnam’s total GDP would surpass Norway, Singapore and Portugal by 2050.

According to the Co-Founder & COO of Vietnam’s first bitcoin exchange, Dominik Weil, the country has a lot of potential for bitcoin as well. “The socio-economic potential of Vietnam is for sure one of the highest in the region[.] This country has proven in the past, how fast it is able to change and adapt to new circumstances – so I am pretty optimistic, that Vietnam will take its place in that race for adoption within the coming 1-2 years.”

His company Bitcoin Vietnam Co. Ltd has played an important role in getting Vietnam’s bitcoin scene off the ground. They launched the country’s first bitcoin broker exchange in March of this year and followed that up with creating the nation’s first live exchange a few months later.

“We are at the moment still in the early days of Bitcoin adoption in Vietnam. Our broker exchange "Bitcoin Vietnam" has, since launch in March 2014, a volume of more than 325 BTC; the live exchange VBTC a volume of more than 100 BTC.

”The company launched their VBTC branded live exchange to bring the country’s active forex traders into the fold. “There is a huge amount of [Vietnamese] people trading on various Forex or commodity trading platforms[.] Since Bitcoin is still a very young asset with a relatively small market cap, there exists a high volatility in the market – and traders naturally love volatility and price swings.”

To increase the attractiveness of trading bitcoin to traders and give traders a way to profit off bitcoin’s downward trend, they launched VBTC Plus with a 8x leveraged trade product called Booster, on December 17. “We saw an ongoing price decline this year after the wild ride in 2013from 10 USD to over 1000 USD within a year – to have the option to short Bitcoin offers traders the possibilities to profit also in such a market environment. Even if you do not want to trade for profit, these trading products allow you to hedge your current exposure to the market – e.g. if you own a nice stash of Bitcoins, you can bet on a price decline in order to hedge your potential volatility risk.”

They claim to allow investors to start trading with as little as $10 and provide a flexible trading environment with Booster. Features for the leveraged product include automatic stop losses, the ability to manually end the trade, take all or part of your investment out and no margin calls.

Beyond trading, the company sees remittances and hedging against inflation as big use cases for bitcoin in Vietnam. The country has over 4 million Vietnamese living abroad and is one of the top 10 remittance markets in the world. According to Vietnam’s Foreign Minister, Pham Binh Minh, remittances accounted for 60-70 percent of foreign investment in Vietnam since 1991.

In the late 80s and early 90s the Vietnamese dong went through a period of hyperinflation.Since then the inflation rate has risen and fallen, sometimes getting as high as 20 percent. The annual inflation rate in recent years has fluctuated below and above 10 percent.

“Vietnamese people love to have control over their own money, since they do not really have much trust in centralized fiat money or the banking system – Bitcoin is able to deliver that promise, even if a lot of people don’t know about the possibilities yet.”

One of the main reasons Weil sees Vietnam becoming the regional leader in bitcoin adoption is through the country’s young population and willingness to change. “Vietnam is one of the fastest-growing economies in the region; the country is changing super-fast. You have a very young population (70% of the population is below 30 years old) which is especially in the urban areas growing up as "digital natives".

Weil and his company have been laying out the basic infrastructure for bitcoin in Vietnam but they will be increasingly focusing their own efforts on education in the upcoming months. “While we are eager to bring further advanced trading products to the Vietnamese market in the coming months, we also definitely put a lot of effort in education – online as well as offline – onBitcoin and related topics. A lot of people still have a lot of misconceptions around Bitcoin and have not really grasped the basics yet – but we are seeing continuous progress on that front as well.”