BitMEX (Bitcoin Mercantile Exchange) is a derivatives exchange, which offers leveraged trading on cryptocurrency-based instruments. This is not a traditional exchange, like Kraken for instance.
The company, security of funds
The company behind BitMEX is called HDR Global Trading Limited. It is registered on the Seychelles, which generally does not inspire a lot of trust. That being said, little to no regulation is applied to the crypto-space in most jurisdictions. Most exchanges earn their credibility by word of mouth, slowly.
That being said, trading at BitMEX offers several key specifics. Most importantly, your account balance and trading results (PnL) are always measured in Bitcoin. While this goes in-line with the company’s main philosophy, it may prove to be an inconvenience for those looking to make systematic trading profits. The regular traders probably also hedge their exposure.
From its foundation in 2014 until now, BitMEX has not experienced any major hack. This is always a positive sign, although not a guarantee for future stability.
The user reviews on BitMEX are not that many, given the fact this is a relatively complicated exchange. However, there are virtually no complaints about the company’s service.
Trading instruments (cryptocurrencies)
As mentioned previously, this exchange offers very interesting trading instruments. They include:
Perpetual swaps function similarly to a futures contracts, except for the fact they don’t expire. You may think of this as an ETF or CFD, although this will be a very loose interpretation.
Currently only XBTUSD is available as a perpetual swap. The price index is taken The trading conditions are as follows:
Futures work the same way the traditional ones, which are traded at futures exchanges do. They have an expiration date, a different Initial and Maintainence margin and a specific settlement mechanism. The coins for witch futures are available are XBTUSD, XBTJPY (Bitcoin vs the Japanese Yen), DASH, ETH, ETC, LTC, XMR, XRP, XTZ and ZEC.
Binary series (or predictions) are another type of instrument, which we will get to later on, as it is vastly different than the rest. The following conditions only apply, for futures and perpetual swaps.
A maximum leverage of 1:100 is available. While forex traders will be familiar with such (or even higher levels, like the 1:888, offered by XM), this is basically unheard of in the crypto-space. Given their volatile nature, the leverage on cryptocurrencies rarely exceeds 1:20.
That being said, a neat feature at BitMEX is the fact you can change your leverage, per position. In effect this allows you to place a maximum loss, after which your single position will be liquidated. With forex brokers, your entire account serves as a guarantee for all of your positions.
The fees on Perpetual Swaps (and some of the futures) are currently -0.025% for the market makers and 0.075% for the market takers. These terms refer to the different traders in relation to liquidity – those who place “passive” orders in the book will receive small rebates, while those trading at the market will have to pay a fee. Additionally, there is a 0.05% settlement fee for futures. All of these levels are very competitive, when compared to most crypto-exchanges.
Forex brokers, on the other hand, charge the costs of trading in their spreads. While there are a lot of factors, which make comparing the two services hard, we have done so here.
Binary Series (predictions)
The B-series are prediction-based contracts, which can only settle at either 0 or 100. This instrument is by far the most unusual and we will not recommend it to beginners. In essence, the B-series are a more complicated way of making a bet on a given blockchain event. As an example there used to be an instrument, associated with the activation of SegWit on the Bitcoin chain, when the fork occurred.
The only b-series betting instrument available at the time of writing of this review is related to the next 1mb block on the Bitcoin blockchain.
B-series are traded with no leverage, a 0% maker fee, a 0.25% taker fee and 0.25% settlement fee.
BitMEX allows trading through a web-based platform. The charting functionality is provided by TradingView, which means the technical analysis aficionados will be pleased.
The top portion allows switching between the different products, while the order placement module is located where the welcome message is in this screenshot.
This is yet another crypto-exchange which provides a vertically arranged order book. While this isn’t a huge issue, people who are familiar with the way traditional trading platforms, like cTrader present the depth of the market will be surprised. Other than that, the platform has a nice visual appeal.
Methods of payment
Only Bitcoin transfers are allowed at BitMEX. If you are used dealing with companies, who support credit cards, or e-wallets (such as Neteller) this exchange may not be right for you anyway, as the trading specifics require detailed knowledge of the crypto-space.
BitMEX is a company which provides access to derivatives based on cryptocurrencies. Despite being based on the Seychelles, the company has proven its worth since 2014. Trading at this exchange is relatively complicated and we will not recommend it to beginners. Even those of you with experience in either the crypto-world or traditional financial markets should look up some tutorials, before trading with serious sums. That being said, those seeking arbitrage trades may find exciting opportunities at BitMEX.
BitMEX Review Conclusion
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