Do you want to participate in the financial markets of the future? Trading cryptocurrency is fast becoming a popular way to make money online. The crypto ecosystem is a fast-evolving space, with plenty of growth potential. According to CoinMarketCap, the total market cap of all cryptocurrencies currently stands at more than $223-billion, with daily trading volumes of over $143-billion.
While that’s a tad bit shy of the $5.5-trillion forex market, it’s still a large chunk of change offering tremendous opportunities for crypto traders. So, how do you start trading crypto? You’ll need to sign up with an exchange to access your trading platform. There are dozens of crypto exchanges, and each of them has a unique offering in some regard.
In this BitMEX review, we’re going to look at BitMEX, one of the more popular exchanges.
Why Is BitMEX Different from other Exchanges?
BitMEX is one of the more esoteric exchanges, and many users find it challenging to navigate the platform effectively. On top of that, back in October 2019, BitMEX makes a significant error, posting all its user’s email addresses.
Seeing this sort of privacy breach happens at the hands of hackers in one thing. However, learning that it was a management blunder doesn’t inspire confidence in the platform.
The confusion around using the platform extends to other participants in the cryptosphere as well. Even CoinMarketCap listed the exchange incorrectly, adding more drama to the situation. Very few crypto participants understand the workings of BitMEX, and we’ll try to explain them to you in this BitMEX review.
What Is the BitMEX Exchange?
BitMEX is an abbreviation for the “Bitcoin Mercantile Exchange.” This exchange acts as a peer-to-peer cryptocurrency trading platform, offering you leveraged contracts bought and sold using BTC.
BitMEX specializes in CFDs, leveraged contracts, derivatives, and margin trading. Sound confusing? Relax, it’s simple to understand. A margin account allows users to trade using your existing account balance to leverage larger trading volumes.
As a result, you can take large positions and “leverage” the buying power of your money to buy up to 100-times more contracts than you would with a cash account. Margin accounts don’t require the same clearing time as cash accounts, allowing you to keep trading, even though the clearinghouse and broker haven’t finished processing your previous trades. With a cash account, you would need to wait for 48-hours between trading sessions to use your account.
A derivative describes a financial instrument that has its market value derived from underlying assets. For example, the derivative could be a combination of commodities. However, the derivative may also include currencies, stocks, bonds, precious metals, or any other financial asset.
Common examples of derivative instruments you may already know are Futures, forwards, swaps, and options. BitMEX combines cryptocurrency derivatives with margin trading. With BitMEX, you don’t trade using USD.
Instead, you trade Bitcoin and other altcoin derivative contracts that derive its value from underlying crypto assets. Therefore, you are not trading the actual spot price of BTC or any other crypto. Instead, you are trading the derivative market, which has different pricing structures.
What are the Types of Contracts Available through BitMEX?
After opening your BitMEX account, you have the option of trading the following asset classes.
- Traditional Futures or Contracts
- Perpetual Crypto Contracts
- BitMEX Upside and Downside Profit Contracts
It’s important to note that contract-wise, the leverage and fee structure are somewhat different, but we’ll cover that later.
What Kind of Leverage is Available on BitMEX?
At the moment, BitMEX is the only cryptocurrency offering 100X leverage. 100-times leverage is absurd, but it can help you turn a small account into a fortune over a short trading career, provided you have a profitable trading strategy.
It’s important to note that trading on margin exposes you to the potential loss of your entire account value. If the trade turns against you, you could even end up owing the exchange money if you have a severely leveraged position you can’t exit in time.
Therefore, you need to understand the danger of trading CFDs, derivatives using leverage. The last thing you want to do is blow up your account on a single trade that goes bad.
Here are the types of leverage available on the BitMEX exchange.
- Perpetual BTC Contracts: up to 100x leverage
- Upside and downside BTC profit contracts: 1x leverage
Traditional Crypto Futures Contracts
- BTC/ XBT 100X Leverage
- Bitcoin Cash 20X Leverage
- Cardano 20X Leverage
- EOS Token 20X Leverage
- Ethereum 50X Leverage
- Litecoin 33.33X Leverage
- Ripple 20X Leverage
It’s important to note that all withdrawals are in BTC. As mentioned, BitMEX is not certified to deal with fiat currency withdrawals in any currency, including USD and Euros.
What Cryptocurrencies Does BitMEX Support?
BitMEX does not allow for USD deposits. This exchange has no KYC policy, and therefore, it does not deal in fiat currencies like the Euro and USD. As a result, you’ll need to fund your account with a BTC transfer, and then use your account balance to place trades on the platform.
For trading futures or other derivatives, you can buy and sell contracts using the following cryptocurrencies. As a side note, the ticker symbol for Bitcoin on BitMEX is XBT, not the BTC symbol used in other platforms like Coinbase.
- Bitcoin (XBT)
- Cardano (ADA)
- Bitcoin Cash (BCH)
- Ethereum (ETH)
- Litecoin (LTC)
- EOS Token (EOS)
- Ripple (XRP)
What are the Fees for Using BitMEX?
There are no fees for trading Upside or Downside Profit Contracts on BitMEX. However, perpetual contracts carry a -0.025% fee for adding liquidity and a 0.075% fee for taking liquidity from the market (selling and buying). Long funding fees are -0.02254%, while short funding rates are 0.2245, with intervals every 8-hours.
Traditional futures contracts in all cryptocurrencies cost a maker fee of -0.025 for XBT and 0.05% for all other cryptos. The taker fee is 0.075 for XBT, and 0.25 for all other crypto assets.
It’s also important to note that BitMEX fees can vary, depending on the type of contract and the crypto you are trading. We like that BitMEX does not charge you any fees on withdrawals or deposits. When you decide to withdraw your Bitcoin from your BitMEX account, you get a minimum BTC network fee, set dynamically according to the load on the Blockchain.
BitMEX Payment Methods And Supported Countries
BitMEX is a wildly popular person to person trading platform for cryptocurrency derivatives. It is owned by Global Trading Limited which is based in Seychelles and Hong Kong. At the time of this post, the platform is not registered, but it is still an effective and safe trading platform that is considered trustworthy. In addition to being popular, it has strong security in place to keep users safe while trading and also works to protect their digital assets.
The BitMEX wallet is one of the safest around and offers multiple layers of protection to help keep user funds safe. In order to make a withdrawal, several signatures are required. In addition to multiple approvals, withdrawals can only occur during specific times during the day. All customer wallets are stored in hardware wallets offline which makes them impossible to hack.
BitMEX user funds offline wallet is a cold storage multi-signature feature that is paired with two-person live approvals before any withdrawals can take place. No private keys are stored in the cloud servers so even in the rare chance that the system was breached, no user accounts would be at risk.
BitMEX Countries Supported
All countries other than those listed as off-limits are supported on the BitMEX platform. If any location be it a city or a country has listed crytotrading as illegal, then BitMex will not be legal to use in those locations. The following locations are specifically barred from trading on the BitMEX platform:
- United States
- Hong Kong
- Québec in Canada
- North Korea
According to the company, the reasons, these locations are barred from trading is purely due to regulatory concerns. In addition, they took an extra step of barring locations where their offices and employees are located for extra security.
Payment Methods Accepted
BitMEX only deals with cryptocurrency trading and all deposits have to be made in the form of Bitcoin. Once you have made a deposit in Bitcoin, you can then trade with flat currencies and other cryptocurrencies. You are able to use your Bitcoin deposit to trade for:
- Ethereum Classic
- Bitcoin Cash
BitMEX as a platform focuses on these trade areas and has been created for traders who prefer niche trading. One advantage of only accepting one form of payment is that there are no deposit or withdrawal fees. Other platforms have high Bitcoin fees from both deposits and withdrawals that can limit the profitability of trading. In fact, the only fees BitMEX charges are Network fees.
As a platform BitMEX is very easy to navigate but faces some limitations by only working with Bitcoin for deposits and withdrawals. There is no limit to the amount of money you can withdraw each day, and deposits are also open 24 hours a day. Withdrawals feature an extra layer of security and are only available at set times during the day. They must be made with a live person which allows fraudulent requests to be denied in real-time. One major drawback is that withdrawal and deposits alike are only available in BTC as opposed to Fiat currencies. The platform has a high trading margin of a max x100 and offers both futures and other derivates. Personal identification is optional and there is little to no red tape when it comes to trading. While the system is most suited for veteran traders, anyone is able to navigate the platform.
Is BitMEX a Secure Exchange?
BitMEX underwent a hacking scare in late 2019. A few days before the exchanges supposed hacking incident, a management blunder exposed the email addresses of all its clients. It’s unknown if the hacking event was related, but a few days later, hackers took control of the official BitMEX Twitter account. The hackers tweeted an ominous message saying, “Take your BTC and run.”
However, there was no hack of the platform and no loss of coins from the exchanges’ hot or cold wallets. Overall, the security features of BitMEX are some of the best in the industry. Some of the unique security features available on this exchange include multi-signature tech for addresses, with multiple keys and multiple holders.
The BitMEX system takes advantage of the Amazon Web Service industry-leading security. The toolset and database for BitMEX feature design with kdb+ code, which is a favorite coding language for leading high-frequency trading firms.
BitMEX Customer Support
BitMEX is available for all countries around the world. However, it’s important to note that BitMEX forbids using the platform with a VPN service.
The customer support on offer from BitMEX is world-class, and you have 24/7 access to the support team through
- Support Ticketing System
- WeChat (id: bitmex)
- IRC (server: irc.freenode.net #bitmex)
- Telegram (Russian)
BitMEX also has a comprehensive archive of troubleshooting articles to help you research problems yourself.
Who are the BitMEX Team?
The BitMEX team consists of experienced economists and developers, as well as HFT professionals, allowing for a reliable and competitive ecosystem that boosts the overall crypto market. HDR Global Trading Limited is the holding company managing BitMEX.
The company incorporated in Seychelles under the International Business Companies Act of 1994. As of 2020, BitMEX has offices in Hong Kong, where it bases its operations. It’s common for crypto exchanges to base themselves in tax havens like Seychelles.
This strategy helps them avoid taxes while remaining out of the eye of the US and European financial authorities that control the fiat system.
The Bitcoin Tester Conclusion
Overall, BitMEX is one of the more unique platforms available for cryptocurrency trading. It seems that the company is secure, with all the compliance in place, and there is no funny business going on behind the scenes.
The margin trading option on BitMEX is appealing for people that want to start with a small amount of money and grow it into a large account.
However, it’s important to note that this platform does not accept USD or any other form of fiat currency for deposits. When it’s time to cash out, you’ll need to take your profits in BTC, not USD.
There are some concerns over security on the platform since the onset of the supposed hack in 2019. However, trading and withdrawals remain stable in 2020, with no sign of a hack affecting the operations of the exchange.