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.
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.
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.