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If you’re in the cryptocurrency market you may have come across BitMEX. BitMEX is a cryptocurrency exchange for contract trading. With many useful tools and features, BitMEX could be what you’re looking for. Wait, before you sign up, read our in-depth review of BitMEX and decide for yourself.
As leveraged trading has attracted attention in the cryptocurrency space, BitMEX has gained popularity as one of the best exchanges for contract trading. However, those looking for spot-trading should take note: this is a derivatives market, as it deals with the trading of derivatives contracts only. For those interested in contracts, BitMEX offers some of the best leveraged trading found in the space.
BitMEX (Bitcoin Mercantile Exchange) was founded in 2014 by HDR Global Trading LTD, consisting of Arthur Hayes, Ben Delo, and Samuel Reed. The three founded the company in Victoria Seychelles in 1994, and now operates in Hong Kong. Hayes, the CEO, is a banker with experience in trading equity derivatives. Reed, the CTO, has extensive experience with web applications, while Delo, the CSO, has experience building trading platforms for J.P. Morgan and IBM. Together, they have built a futures exchange that has been gathering attention in recent years.
BitMEX Product Offerings
BitMEX offers a number of different contracts to trade in Bitcoin; Litecoin; Ethereum; DASH; EOS; Cardano (ADA); TRON (TRX); and Ripple (XRP). Currently, Bitcoin is offered in perpetual contracts; 1 month or 4 month futures contracts; and 7-day UP/DOWN contracts. All other token offerings (LTC; ETH; DASH; EOS; ADA; TRX; and XRP) are offered in 1 month futures contracts only.
The contracts can be a little confusing to newcomers, so it is best that this platform be used by experienced traders only, to preserve wealth and prevent financial disaster. For a quick guide: Perpetual contracts have no expiration date, and the price mimics the spot trade price and trades close to the reference index price. Perpetual contracts have up to 100x leverage through BitMEX. Traditional Futures contracts are an agreement to buy/sell an asset at a prearranged time. BitMEX UP and DOWN contracts allow traders to potentially capitalize on market moves (either up, or down), by paying the customer the dividend of the contract price minus the strike price. Maximum loss on UP/DOWN contracts is limited only to the amount that was initially invested, as there are no liquidation prices or margin calls.
BitMEX offers leverage on all contracts except UP/DOWN contracts, however, users need to take care of their margin balances/trade maintenance to ensure their funds are not liquidated. An initial margin is necessary, which is the amount of margin required to open a position. Maintenance margin is the amount of margin required to keep the position open. Minimum deposit required per trade is determined by taking $1 divided by the current price of Bitcoin, times 1% ([$1/Current BTC Price] * 1%).
It should be noted that BitMEX uses cold storage for all funds; there is no hot wallet in use storing cryptocurrency. This helps keep users’ funds safe from outside attacks.
Opening an Account on BitMEX
The process of opening an account on BitMEX is very straightforward and easy to get through. To start, all one has to do is click the “Register” button found at the top right-hand corner of BitMEX’s homepage, or the top header of any of their other webpages.
Once the “Register” button is clicked, the new user will be asked to provide a valid email address, as well as a password, country of residence, and full name. To proceed further, the Terms of Service and Privacy Notice must be reviewed and accepted (check the box). From there, BitMEX will send an email to the provided email address, containing a link that will verify the email address, after which, the user can fund their accounts. BitMEX allows users to deposit and withdraw in BTC only; there are no fiat on-ramps, or wallets that support other cryptocurrencies.
Users can then add 2-Factor Authentication (2FA) to their accounts for an added layer of security. A device (such as a cellphone) uses an authentication application (such as Authy, or Google Authenticator), which broadcasts a unique numerical code every 30 seconds. The proper numerical code must be entered within the 30 second time limit, or the required number would change to the newly broadcasted number.
There are no fees for deposits or withdrawals (except the standard network fee it costs to send BTC to a wallet), nor does it charge a fee for funds received or paid. For trading, BitMEX operates on a Maker/Taker fee format. Hidden orders (known as “Iceberg Orders”) pay a Taker fee until the quantity hidden is fully executed, which then functions as a normal order. The fees on BitMEX differs between the types of contracts offered, and the different cryptocurrencies tradable with those contracts.
The fee schedule for Perpetual Contracts is as follows:
The fee schedule for Traditional Futures Contracts is as follows:
The fees for BitMEX UP/DOWN Contracts is as follows:
BitMEX Platform and Tools
The trading platform on BitMEX is fairly straightforward and simple to use, though the amount of information on the window may appear to be a little congested. At the top header of the trading window, the user will find the current price information for all of the contracted cryptocurrencies offered. Below, the customer is able to switch between the different cryptocurrencies/contracts by clicking any of the tabs available. To the far left side of the screen, the customer is able to input the quantity and price of their order, as well as choosing the order type (Limit; Market; Stop Market; Stop Limit; Trailing Stop; Take Profit Limit; Take Profit Market). Below this area, in the same column, is an adjustable meter, allowing customers to adjust the amount of leverage used on the trade. Below the leverage meter, customers will find contract details about the particular contract the user may be looking to trade.
To the right of the order-taking column, users will find an Orderbook, displaying the various open buy/sell prices all users have currently placed. Next to the Orderbook, is a candle chart, with a depth chart below it, displaying past and current market information. To the right of the charts is the trade history, displaying the history of every trade executed.
Towards the bottom of the page, the customer will find their individualized trading history, which shows information such as open trades; closed positions; active orders; stops; and fills.
If the realtime contracts trading platform is a little overwhelming, BitMEX offers a live trading simulation (BitMEX Testnet) built on Bitcoin’s testnet, allowing users to trade fake money on a virtual exchange. This is a very handy feature, as it allows potential new users to get a grasp of how the exchange works without having to sacrifice real personal wealth. The Testnet can be a little hard to find, as it looks nearly identical to the real BitMEX. However, the Testnet can be found by clicking “Want to try simulated trading?” on the main BitMEX page, or by clicking here.
BitMEX also has chart integration with Sierra Chart, NinjaTrader, Tradingview, Coinigy, and Cryptowatch. This allows users to use technical analysis on BitMEX’s charts, outside of BitMEX. Tools such as these are essential in any trader’s toolkit. For those interested in bot trading, BitMEX has their own Market Maker, based off of Liquidbot, allowing for 2-sided markets. BotVS, one of the largest cryptocurrency bot traders in China, also supports BitMEX.
To top it all off, BitMEX also has a Trollbox, similar to that of HitBTC, which allows users to chat with each other, whilst making trades on the platform. This can be a good way to pass time while waiting for trades to execute, as well getting to know other traders on the platform. This can generally be found towards the bottom of most BitMEX pages.
BitMEX Customer Service
Regarding issues of customer service, BitMEX has a few services in place to aid customers with whichever problems may arise, or for more information regarding the services and products BitMEX offers. For starters, customers should check the FAQ, which hosts a large repository of commonly asked questions — and answers to those questions. A Contact section allows users to open up a support ticket with BitMEX’s support in the case that the FAQ does not provide the needed information. The team also has an IRC (Internet Relay Chat) channel, allowing customers to speak with a customer service representative in real-time. BitMEX also has accounts at both Reddit and Twitter. This information can be found at the bottom footer section of every BitMEX webpage.
What Makes BitMEX Unique?
For any trader interested in trading contracts, it’s hard to ignore an exchange like BitMEX. Though they do not offer spot-trading, their leveraged contracts should suffice for any serious (and professional) trader. Their integration with several charting software companies allow for technical analysis outside of the platform. BitMEX also uses cold storage for all funds, to help ensure the safety of their users’ funds. The simulation market is a great tool to help newcomers learn how a derivatives market works, and how it differs from a spot-trading market.
Is BitMEX Trustworthy?
First and foremost, BitMEX should only be used by professional traders in legal countries, as BitMEX is unregulated. Any accounts found operating outside of legal jurisdiction are liable to be frozen, with the funds lost indefinitely. With that said, BitMEX appears to be a viable option for leveraged contracts trading.
In November, 2019, BitMEX accidentally leaked email addresses (and potentially other delicate information) by not adding a blind copy protocol to their mailing list prior to sending their emails out. Subsequently, their Twitter account was also hacked within the same day. Tweets were sent out, saying that the exchange was hacked, and that users should withdraw their funds before it was too late. BitMEX regained control of their Twitter, but the damage had already been done. The outcome of this misfortune still hangs in the balances, as BitMEX claims that no more than email addresses had been leaked, and that once the error was noticed, no more emails were sent without the protocol in place. Many have speculated whether or not the sensitive information has already sold on the darkweb. Either way, this is a very concerning mishap, and should be taken into consideration before opening an account with BitMEX. Further information can be found at BitMEX’s Blog.
For a derivatives market, BitMEX has the volume, leverage and a wide choice of different contracts that can allow any serious, professional trader to build their stack of Satoshis (Bitcoin). Many trust in BitMEX and its platform; others, on the other hand have claimed to have a locked account (perhaps due to being geographically out of legal jurisdiction). As BitMEX is unregulated, it is highly recommended that users do their own due diligence in researching whether the platform is legal to use in their country. In light of the recent mishaps at BitMEX in November, 2019 (customer email addresses being leaked, and Twitter account being hacked), all potential customers are warned to take proper precautions beforehand.
- Fairly straightforward to use
- High leverage on multiple contracts
- BitMEX Testnet allows users to practice trading, and learn how the exchange works
- Funds stored in cold-storage wallets
- Exchange has some of the highest volume in the industry.
- Users have reported frozen accounts
- Does not offer spot-trading
- Unexperienced traders could lose everything if not careful
- Limited amount of cryptocurrencies offered
- Only accepts BTC deposits/withdrawals, as there is no fiat on-ramp.