While famous brands Coinbase, Binance, Bittrex and also Kraken in many cases are considered truly being the most goto location for crypto currency investors, so were you aware BitMEX is currently accountable for its a number of the most significant investing volumes from the business?
In reality, it had been recently documented the stage achieved that a record-setting 24hour trading amount of 11 billion.
With that said it’s essential to be aware that BitMEX is maybe not your normal crypto currency market. To the other hand, the stage succeeds only in derivative-style fiscal devices. More importantly, traders in BitMEX possess the possibility to trade favorite crypto currencies such as Bitcoin and Ethereum at leverage rates of over 100x.
Taking in to consideration the insecure temperament of these crypto-centric services and products which BitMEX delivers, we’d propose studying our in depth review before launching a free account. In doing this you may create the best decision concerning if the stage has been proper your expenditure objectives.
We’ll protect sets from the way in which a platform performs, exactly what it’s possible to trade, affirmed crypto currencies, prices, and also security.
Let’s beginning with having a synopsis of exactly what BitMEX happens to be.
What Exactly Is BitMEX?
Bitcoin Mercantile Exchange — simply BitMEX since it’s understood, can be an worldwide crypto currency market which facilitates the selling and buying of all crypto-centric derivatives. Founded in 2014 and currently headquartered at the Seychelles, the system has been set by CEO Arthur Hayes, together with Samuel Reed and Ben Delo.
The most important idea of why BitMEX is the fact that end users have immediate accessibility into this worldwide crypto currency buying and selling industry using complex monetary devices which you’ll typically locate within the conventional expenditure room.
This comprises famous brands endless contracts, including futures , margin buying and selling, and also the stage’s proprietary BitMEX UP and DOWN contracts. Don’t worry, well explain the ins and outs of how these asset classes work in more detail further down.
Although the platform was only formed in 2014, BitMEX is responsible for some of the largest trading volumes in the cryptocurrency arena. As noted earlier, the platform reached a new milestone in June 2019 where a reported $11 billion of trading activity went through BitMEX in a mere 24-hour period. This in itself has put the crypto-centric exchange on the rader of key US regulators for some time now.
In fact, it was reported in July 2019 that the U.S. Commodity Futures Trading Commission (CFTC) had opened an investigation into BitMEX. This is with respect to platform allegedly allowing US citizens to use the exchange, even though they are prohibited.
In reality, the general consensus is that US citizens do in fact use the platform for their trading endeavours, not least because BitMEX users are able to open an account anonymously. Even with the platform utilizing IP detection software, US users simply need to install a VPN.
Ultimately, irrespective of the platform’s industry-leading trading volumes, BitMEX operates in an unregulated manner and thus, users should still tread with caution.
So now that we’ve covered the basics, in the next section of our BitMEX review we are going to explain how the platform’s derivative products work.
Derivatives Available at BitMEX
Regardless of whether it’s in the context of the traditional financial markets or the cryptocurrency arena, derivatives are a highly complex asset class that should only be utilized by those with a firm understanding of how they work.
Here’s what you need to know about the derivatives available at BitMEX.
In its most basic form, a perpetual contract is very similar in nature to a conventional futures contract — albeit with one key difference. Unlike futures contracts, which typically have a maximum expiry date of three months, perpetual contracts never expire.
This means that there is no settlement date on the perpetual contracts purchased via BitMEX. In other words, they are only settled when you decide to exit the trade.
It is also worth noting that perpetual contracts most commonly trade at a different price to futures contracts. This is because the former aims to trade as close to the reference index price as possible, while the latter is exclusively focused on demand and supply.
If you do have an interest in crypto-centric futures contracts, BitMEX also facilitates this. All futures contracts are settled on a cash-basis, and depending on the underlying cryptocurrency it is tied to, comes with an expiry period of 7 days, 1 month, or 4 months.
BitMEX UP (Upside Profit) Contract
The BitMEX UP (Upside Profit) Contract is offered as a way to speculate on a particular cryptocurrency increasing in value by a certain date. In layman terms, they operate in a very similar nature to traditional options contracts. Notably, the BitMEX UP (Upside Profit) Contract will have both an expiry date and strike price.
A 7 day BitMEX UP (Upside Profit) Contract on Bitcoin at a strike price of $10,500 would work as follows. If you felt that Bitcoin was about to go on a short-term bull run and thus, you felt that the market price would exceed $10,500 within the next 7 days, then you could pay a’Premium’ to access the market. Only one of two things can then happen.
Scenario 1: The price of Bitcoin does not surpass the strike price of $10,500. This means that you simply lose your premium.
Scenario 2: The price of Bitcoin does surpass $10,500 within 7 days. This then gives you the option to make a purchase and profit from the upside.
BitMEX DOWN (Downside Profit) Contract
The BitMEX DOWN (Downside Profit) Contract works in exactly the same way as the UP contract, albeit in the exact reverse. Ultimately, by engaging in this particular derivative, you are speculating that the underlying cryptocurrency will go down in value before a pre-defined time period.
So now that we’ve covered the main derivatives that you can trade at BitMEX, in the next section we are going to discuss the specific cryptocurrencies that can be speculated on.
What Cryptocurrencies Does BitMEX support?
First and foremost, it is important to note that BitMEX functions on one cryptocurrency and one cryptocurrency only — Bitcoin, As such, all deposits, withdrawals, profits and losses are stipulated in Bitcoin.
Nevertheless, here’s a breakdown of the specific cryptocurrency derivative pairs that you can trade at BitMEX.
- BTC/USD — Perpetual Contracts (no expiry)
- BTC/USD — Futures (1 month expiry)
- BTC/USD — Futures (4 month expiry)
- BTC/USD — BitMEX UP (Upside Profit) Contract (7 days)
- BTC/USD — BitMEX DOWN (Downside Profit) Contract (7 days)
- ETH/USD — Perpetual Contracts (no expiry)
- ETH/BTC — Futures (1 month expiry)
- ADA/BTC — Futures (1 month expiry)
Bitcoin Cash (BCH)
- BCH/BTC — Futures (1 month expiry)
- LTC/BTC — Futures (1 month expiry)
- XRP/BTC — Futures (1 month expiry)
- TRX/BTC — Futures (1 month expiry)
Now that you know the specific derivative products that you can trade at BitMEX, in the next section we are going to explore the platform’s leverage offering.
Leverage at BitMEX
It is safe to say that one of the most important factors that has led to BitMEX’s success is its leverage offering. In fact, unlike traditional brokerage platforms that operate under a stringent regulatory framework, BitMEX offers leverage to all of its customers — irrespective of experience or financial standing.
Firstly, BitMEX offers leverage on all of its crypto-centric derivative products apart from its UP and DOWN contracts. This means that you can apply leverage on all of the previously discussed supported cryptocurrencies.
The exact amount of leverage that you are able to get is specified by the underlying derivative. Each derivative product will have its own margin and maintenance levels, so it’s best to check this out before you get started. However, the platform’s most liquid market — the BTC/USD perpetual contract, offers users leverage levels of up to a whopping 100x.
In layman terms, this means that if you only had the Bitcoin equivalent of $100 in your account, you could effectively trade with a $10,000 bankroll. However, it is reasonable to suggest that trading at a level of 100x is no different to rolling the dice in a casino. In approximate terms, if your chosen investment went down by just 1%, you would instantly be liquidated. This means that your initial $100 margin would be lost in one quick swoop.
How Much Does BitMEX Cost? Fees and Funding Rates
e system employed by BitMEX is arguably just as complex as the derivative products it offers. This is further amplified by the fact that all deposits and balances are expressed in terms of Bitcoin, meaning that it can be difficult to know exactly what you are paying and when.
As a quick note, unless you are trading a BitMEX UP or DOWN contract, all trading fees at the platform utilize a market maker/taker system. This means that those providing the exchange with liquidity will receive a rebate (market makers), and those using the liquidity already available (market takers) will pay a variable trading fee that is expressed as a percentage.
Nevertheless, we’ve broken down the key points below.
If you’re looking to trade a BTC/USD or ETH/USD perpetual contract, then market takers will pay 0.075% per trade, while market makers will get a 0.025% rebate. Regarding the former, this is ultra-competitive.
However, it is also important to note that perpetual contracts also come with funding rates — irrespective of whether or not you apply leverage.
Perpetual Contracts Funding
In a nutshell, whether or not you need to pay a funding fee will be dependent on whether you are long or short. This will be determined by market forces, and you’ll know what you are going to pay before the funding round takes place. BitMEX executes funding every 8 hours, and the specific percentage will again vary depending on market forces. Here’s a couple of quick examples so that you can get your head around the funding conundrum.
- BTC/USD — Funding is 0.06%As the funding rate is positive ( ), this means that those currently long on Bitcoin will need to pay a funding fee of 0.06%. The fee is based on the amount you currently have outstanding on your trade. The funding fee is then paid to those that are short on Bitcoin as a rebate.
- ETH/USD — Funding is -0.07%As the funding rate is negative (-), this means that those currently short on Ethereum will need to pay a funding fee of 0.07%. The fee is based on the amount you currently have outstanding on your trade. The funding fee is then paid to those that are long on Ethereum as a rebate.
Market makers and market takers trading Bitcoin futures at BitMEX will pay -0.0250% and 0.0750%, respectively. For all other crypto-based futures on the platform, market makers and market takers will pay -0.05% and 0.250%, respectively. While there is no settlement fee for non-Bitcoin futures, all BTC/USD futures come with a settlement fee of 0.05%.
BitMEX UP and DOWN Contracts
All BitMEX UP and DOWN contracts can be traded without paying a trading fee. This is also the case for settlement.
Deposits and Withdrawals at BitMEX
As noted earlier, the entire BitMEX platform operates on Bitcoin, meaning that you can only deposit and withdraw BTC. The deposit process subsequently works in the same way as any other cryptocurrency exchange.
Once you have created an account at BitMEX, you’ll need to head over to the deposit page to access your unique Bitcoin wallet address. You’ll then need to head over to your external Bitcoin wallet, paste the BitMEX wallet address in, and transfer the funds.
BitMEX claims that all deposits are credited after 1 blockchain confirmation. This means that it should take in the region of 10 minutes. There is no minimum deposit to contend with, although derivative contracts normally start with a minimum margin of $1 (BTC equivalent). No fee is charged to make a deposit, other than the respective blockchain mining fee.
When it comes to withdrawals, this works in much the same way as the deposit process. You simply enter the external wallet address that you want to transfer the funds to via your BitMEX account portal.
BitMEX does not charge a withdrawal fee. Take note, BitMEX executes withdrawals once per day. As long as you make the request before 13:00 (UTC) then you’ll receive the funds the same day.
Who is Eligible to Trade at BitMEX?
Your eligibility to trade at BitMEX will be determined exclusively by the country you reside in. It has been common knowledge since day one that traders from the US cannot use the platform. Not only do BitMEX state this themselves, but the platform bans users accessing the website with a US IP address. However, it is also common knowledge that US citizens are able to bypass these restrictions with ease.
As all BitMEX accounts are anonymous, users can simply obtain a non-US VPN. In fact, although these numbers cannot be substantiated, it was reported earlier in the year that of the $965 billion that was traded on BitMEX in 2018, a whopping $138 billion of this was made up from users based in the US.
It was also recently reported that BitMEX has since made the decision to ban traders located in the three locations it has a legal presence. This includes Hong Kong, Bermuda, and the Seychelles — which is where its headquarters are based.
On top of the above, BitMEX also restricts citizens from Cuba, Iran, Syria, North Korea, Sudan, and Qubec in Canada. However, how the platform enforces these restrictions remains to be seen.
Is BitMEX Safe?
Due to the sheer volumes that BitMEX is responsible for, one would expect that the platform utilizes institutional-grade security features to keep your funds safe. However, this should never be assumed and thus, we’ll need to further explore what security safeguards the platform provides.
One of the most effective security controls available in the cryptocurrency exchange arena is that of cold storage. For those unaware, this means that the digital assets are stored in a hardware wallet offline — meaning that they are never exposed to online servers. In the case of BitMEX, although the platform doesn’t define the specific percentage of person capital which can be stored in cool storage, also it notes it really is actually the “bulk of funds. “
In sequence to get into the capital stored in cool storage, then BitMEX has already installed a multi-signature Proto Col. Which usually means the 3 people who have accessibility into this pocket, at the least 2 of these must register the trade to get your own pocket to discharge the capital.
Two-Factor Authentication (2FA) and Email Notifications
On the top of maintaining vast almost all user cash in cold-storage, BitMEX offers numerous added safeguards. Primarily you have the option of setting-up 2FA. It follows that each single time you try to sign into to a own account you’re going to be asked to go into a exceptional PIN number which is only able to be be received by your cell telephone.
On top of the, BitMEX will deliver you an email notification each single time you play key accounts role. This consists of log ins, trade executions, deposits, and withdrawals.
Although 2FA isn’t compulsory at BitMEX, e mail alerts really are. The primary grounds behind it is hackers who have gained usage of BitMEX consumer account have handicapped e mail notifications, meaning the genuine proprietor had no comprehension of their hack before they detected that their accounts balance was removed full.
As we temporarily noted previously, BitMEX isn’t licensed or accredited with almost any regulatory bodies. The parent business HDR Global Trading Limited, is positioned inside the Seychelles, which in relation to regulatory supervision, speaks for it self.
On the 1 hand, it’s rather evident that BitMEX would identify it self at a jurisdiction that’s renowned because of the lax attitude in the direction of law, perhaps not because of the essence of the derivative services and products that the stage gives. But it’s crucial t
o not forget which if BitMEX a single day stop to exist, so you are going to efficiently don’t have any body to show to.
It needs to be noticed the stage’s CEO — Arthur Hayes, usually creates looks on main stream networking platforms like Bloomberg and CNBC. This in the minimum exemplifies the CEO is really happy to answer issues from the community domainname, also introduce the organization because being a transparent thing.
Customer Support in BitMEX
As a worldwide stage having countless of clients located globally, BitMEX features assist in 5 languages. This Addresses English, Japanese, Chinese, Korean and Russian.
However, to a market which eases countless dollars from trading amounts every single each evening, it remains to be noticed the stage doesn’t provide a phone assistance line
Neverthelessthe most important station to get BitMEX is by simply increasing an internet service ticket. Instead, the stage additionally comes with a taste on Wechat, Telegram (Russian only), Weibo, Twitter, along with Reddit.
Irrespective of this speech that you will require, the BitMEX support team works twenty four hours every day, seven days each week.
BitMEX Review: The Verdict?
In short, BitMEX is presently among many absolute most widely used crypto currency exchanges on the — notably regarding dealing volumes.
However, not like industry moves Binance, Coinbase, along with Bittrex, BitMEX focuses primarily on exceptionally elaborate crypto-centric derivatives. Therefore, the stage needs to just be retrieved by people with advanced level understanding of complex fiscal motor vehicles.
If you really do, then you definitely’ll have accessibility to endless contracts, including stocks and the stage’s own UP/DOWN contracts.
On very top of its massive dealing volumes and 24/7 high performance capacities, BitMEX is also famous for the way it can give leverage in the click of the single button.
In reality, irrespective of one’s experience from the by-product market-place, you’re able to get leverage of up to 100x over the stage’s trademark BTC/USD endless contracts.
With that said it’s absolutely basic that you just know the hazards both leverage and derivative trading attracts before to starting a free accounts together with BitMEX.
Ease of Use
- Margin Trading
- High Volume Exchange
- Lots of Derivative Products
- High liquidity
- Good Trading Engine
- Not to Beginners
- No Fiat Payments
- No Phone Support