We all know that financial markets keep changing their movements, and, there are several tools and technologies which help traders to earn profits. Trading platforms have become the latest means of executing trades. In the cryptocurrency market, these platforms are helping traders to make millions of dollars by making use of advanced tools and technologies.
BitMEX is one such trading platform that is gaining huge popularity in the crypto space today. This trading platform offers plenty of trading features to the investors and helping them to stay successful in the volatile cryptocurrency market.
While Binance, Bittrex, and CoinBase are considered the best cryptocurrency exchange platform, did you know that BitMEX is now responsible for some of the largest trading volumes in the cryptocurrency market?
In fact, as per records, it was recently reported that this platform has achieved a record-setting 24 hour trading volume of about $11 billion.
It is important to note that BitMEX is not your typical exchange, but it is a cryptocurrency derivative that allows its traders to trade popular cryptocurrencies like Bitcoin at a leverage level of up to 100x.
Is it the best platform for crypto traders to use? Here, we will guide you through all of its features and what the hype is all about BitMEX? We have included all the information related to this platform, how it works, what you can trade, what are the supported cryptocurrencies, security, fees, and more.
Let’s start by getting an overview of what BitMEX actually is?
What is BitMEX?
Registered under the International Business Companies Act, BitMEX (Bitcoin Mercantile Exchange) is a crypto trading platform designed for expert traders for margin and leverage trading. This platform lets you trade supported cryptocurrencies with leverage up to 100x.
HDR Global Trading Limited established BitMEX exchange in 2014 and since then it has witnessed meteoric growth to become a leading cryptocurrency exchange. The Seychelles domiciled exchange is a popular derivative trading and BitMEX margin trading. However, BitMEX trading is somewhat different because it does not offer direct Bitcoin or cryptocurrency directly.
Traders deal with contracts instead of direct currency which is more volatile compared to traditional trading. Therefore the platform is meant for experienced traders and investors that require very little guidance. To open an account on BitMEX, all you need is confirmation that you are over 18 years and an email address. Unfortunately because of legal issues, the BitMEX platform is not available for US traders but that should not be a problem because TrailingCrypto supports various top crypto exchanges that one can use.
It only accepts payments in Bitcoin. So, even if you are buying or selling other cryptocurrencies like Ripple, Ethereum, and Litecoin, you must have to start by depositing Bitcoin.
Rather than trading cryptocurrencies directly, the traders at BitMEX trade contracts. So, BitMEX exchange is better suited to the experienced traders. Leverage trade contracts by this exchange help in delivering trades faster. This is a reliable platform that provides liquidity to support Bitcoin trades.
On BitMEX, XBT-USD is one of the most popular and most traded perpetual swaps which have changed the cryptocurrency world for the better.
Traders interested in crypto and fiat currency investments can benefit from BitMEX as it is considered one of the safest exchanges for margin trading. It is the best and highly-rated platform for BTC deposits, spot trading, and maximum leverage trading.
Derivatives available at BitMEX
Here’s what you need to know about the derivatives which BitMEX offers:
In its most basic form, a perpetual contract is similar to a conventional Futures contract with only one key difference. Unlike Future contracts, perpetual contracts never expire which means there is no settlement date on the contracts purchased via BitMEX.
In other words, we can say that these are only settled whenever you decide to exit the trade.
If you are interested in crypto futures, BitMEX also offers this. All Futures contracts are settled on the cash basis, and also depend on the underlying cryptocurrency it is tied to. These contracts come with an expiry period of 7 days, 1 month, or 4 months.
BitMEX UP contracts
BitMEX UP (Upside Profit) contract is offered as a way to watch on a particular cryptocurrency increasing in value by a particular date or time period. These contracts operate in a similar way to traditional contracts. Additionally, these contracts have both an expiry date and strike price.
Let’s understand this with an example:
A 7-day BitMEX UP contract on Bitcoin at a strike price of $10,000 would work as follows. If you think that Bitcoin was about to go on a short-term bull run, and thus, you think that the market price would exceed $10,000 in the next 7 days, then you could pay a premium to access the market.
BitMEX Down contracts
This contract works in the same way as the UP contract, but in the exact reverse. So, by engaging in this derivative, you are watching that the underlying cryptocurrency will go down in value before a pre-defined period.
So, these are the main derivatives that you can trade on BitMEX. Now, we will discuss the specific cryptocurrencies that can be speculated on.
BitMEX trading and markets supported
The BitMEX platform exclusively supports crypto trading through derivative and specialized margin trading. The exchange offers leveraged trading for margin traders and other trading options. Leverage is appealing for experienced traders who are willing to risk and have great experience in speculative trading. Traders get to enjoy the leverage of up to 100X on futures and spot for short and long orders. Although leverage can result in massive returns it also can lead to significant losses.
Despite BitMEX only allowing for Bitcoin deposits, it nonetheless allows trading of different types of crypto and fiat currencies such as the US dollar, Chinese Yuan, and Japanese Yen. After depositing bitcoin, one can then purchase other cryptocurrencies such as Bitcoin Cash, Ethereum, Ethereum Classic, Dash, Monero, Litecoin, Tezos, Ripple, and Zcash.
Cryptocurrencies that BitMEX supports
The first and foremost thing to note is that BitMEX functions on one and only one cryptocurrency, i.e. Bitcoin. All the deposits, withdrawals, profits, and losses are stipulated in Bitcoin only.
Here are some of the specific cryptocurrency derivatives which you can trade on BitMEX are:
- Bitcoin – BTC/USD
- Ethereum – ETH/USD, ETH/BTC
- Bitcoin cash – BCH/BTC
- Cardano – ADA/BTC
- Litecoin – LTC/BTC
- Ripple- XRP/BTC
- Tron- TRX/BTC
Leverage at BitMEX
One of the most important factors which has led to the success of BitMEX platform is the leverage trading. BitMEX offers leverage on all of its crypto centric derivative products apart from UP and DOWN contracts. Yes! You can apply leverage on all the supported cryptocurrencies discussed above.
The exact amount of leverage that you are able to get is specified by the particular derivative. Each derivative product will have its own margin and maintenance levels. So, it’s important for you to check all such aspects before starting trading.
The platform’s most liquid market is BTC/USD perpetual contract which generally offers users leverage levels of up to 100x.
Let’s say, you have Bitcoin equivalent to $100 in your account, and with leverage trading, you can effectively trade with $10,000 leverage.
All this means that, if you have a leverage of 100x, you will need to put a margin of 1% of the initial amount of the trade.
How much are the funding rates and fees at BitMEX?
The platform doesn’t offer variety in their commissions, fees, and spreads, but they rather have a fee scheduled for conventional future trading. Besides the standard fees, the exchange also offers leverage of up to 100X on certain crypto traders.
For instance, Bitcoin fees are 1% of the initial margin and 0.5% maintenance. The settlement, maker and taker fees are 0.5%, -0.25% and 0.075% respectively.
BitMEX exchange’s taker fees which are at 0.075% is quite low and this gives the exchange a competitive edge to other exchanges. Also, makers have a negative fee, which means that they get paid for making orders. Although the pay isn’t that much but at least there is some reward.
Most important thing with the exchange is that it focuses mainly on options trading. As a result, its fees are divided into contract groups that include downside and upside profit contracts, traditional futures as well as perpetual contracts.
The only exception for the standard fees for BitMEX trading is varying charges for Zcash and Tezos that do not have a taker fee but an incredible 0.25% taker and also settlement fee.
BitMEX has highly-competitive trading fees which depend on the cryptocurrency you are trading. Unless you are trading BitMEX UP or DOWN contract, all kinds of trading fees at this platform utilize a market maker/taker system.
At present, the fees on perpetual and future swaps are -0.025% for makers and 0.075% for takers.
However, it is quite important to note that perpetual contracts also come with funding rates- irrespective of whether you are applying leverage or not.
Perpetual contracts funding
The funding fee usually depends on whether you are going long or short. BitMEX executes funding in every 8 hours, and the specific percentage will vary again depending on the market forces. Here are the quick examples to see around the funding mystery:
- BTC/USD- Funding is +0.06%
As the funding rate is positive here, this means that those currently on long on Bitcoin will have to pay a funding fee of 0.06%. This fee will be based on the amount which you currently have outstanding on your trade. Then, this funding fee is paid to those that are short on Bitcoin as a rebate.
- ETH/USD- Funding is -0.07%
As we can see the funding rate is negative here, all this means that those who are currently short on Ethereum will need to pay a funding fee of 0.07%. This fee is based on the amount which currently has outstanding on your trade. In this case, the funding fee is paid to those who are long on Ethereum as a rebate.
BitMEX UP and DOWN contracts can be traded without paying any trading fee.
Deposits and withdrawals at BitMEX
BitMEX is a cryptocurrency exchange only, which means that the new cryptocurrency traders will have to make a Bitcoin purchase first and then deposit BTC into that exchange.
The entire platform operates on Bitcoin, which means that you can only deposit and withdraw BTC.
Once you have created an account at BitMEX, you need to head over to the deposit page to access your unique Bitcoin wallet address. Then, you will need to head over to the external Bitcoin wallet, paste the wallet address here, and then transfer the funds.
No fee is charged to make a deposit! The minimum amount you can put on your account is 0.0001 BTC.
When it comes to withdrawals, this works in the same way as the deposit process. You need to enter the external wallet address that you want to transfer the funds to via the BitMEX account portal.
BitMEX executes withdrawals once per day and doesn’t charge any withdrawal fee.
Security on BitMEX exchange
BitMEX security is top-notch as it allows deposits and withdrawals of BTC. BitMEX addresses are multi-signature with multiple keys with multiple holders.
How to get started with BitMEX?
The registration process on BitMEX is simple. You need your email to get started plus you can also secure your funds using 2-FA authentication feature that BitMEX offers.
The website takes a couple of minutes to complete the registration process from start to finish. You can either choose or skip the KYC process, which is a bit complicated.
Steps to create a BitMEX account
- Visit the BitMEX website, click on the register tab in the top right corner of the page
- Fill in all the details and enter the email address to generate a password
- Verify the email address by clicking on the link sent by the BitMEX exchange platform to your registered email
- Click on ‘Verify my email’ link and complete all the registration process
- Your account is created on BitMEX
Registered account holders can sign in and make Bitcoin deposits instantly by following the below steps:
- Click on the account at the top left corner of the page
- Go to the BitMEX wallet page
- Click on the deposit button and enter the deposit address link
- Use Bitcoin address and click on ‘Send Bitcoin to’
- Copy the address from the crypto wallet and enter it in the ‘withdrawal form’ field
BitMEX API has an application programming interface (API) which is used for the powerful trading features.
BitMEX uses an automated trading engine and has a BitMEX exchange bot which helps traders in quoting instantly and continuously in the two-sided market.
According to BitMEX exchange bot review, it also supports several API keys to provide a good starting point for trading.
How to trade using BitMEX?
For crypto traders, the interface is one of the most important considerations. When you log in on BitMEX first, you will see the trading interface which is well-laid and intuitive.
The top trading bar has a static display and provides easy navigation throughout the ‘Trade’ window. Now, you will see the ‘Accounts’ page and ‘contract’ information which is very easier to comprehend.
Although the trading platform interface is a bit cluttered, it is nonetheless very fast and reliable with numerous widgets that can be personalized according to the trader’s preference. The trading view has diagrams at the center and on the left, there is the current order book and on the right history.
The charting package here at BitMEX is provided by Trading View which are renowned for smooth and responsive charts. Traders can make use of advanced trading tools to refine their trading edge in maximizing profits and minimizing risks.
BitMEX charts offer a wide range of tools and time frames to draw chart patterns, trend lines, etc. to perfectly time a trade order using limit, market, or stop order.
In this trading interface, all positions are displayed at the bottom and can be monitored easily. The position size, margin, asset, entry price, etc. are all displayed and updated in real time. Pending orders can be displayed by clicking on the ‘Active orders’. This also provides an option to review, modify, and deleting the order.
After making a trade, you can track the order via Active Orders which allows for fast and effortless management as well as cancelation of orders. Unfortunately, the platform is only meant for desktop but it is usable and user friendly.
BitMEX exchange platform has a profit and loss calculator which tells what risks are exactly involved. Only Bitcoin trades can be calculated with this tool. BitMEX calculator is used for checking:
- Entry price is lower than exit price
- Short position at low exit price
- Exit price higher than the entry price
To conclude BitMEX exchange review, you can access the best tools and experience a unique trading service with this amazing platform. It is quite safe to say that this exchange platform offers advanced trading techniques for the users.
The platform is well-suited for the expert and professional traders, and for those, who are ready to trade volatile risk assets. And, this is all that makes it the best crypto exchange.
So, trade with BitMEX via TrailingCrypto for large daily volumes of derivatives exchange.