BitMEX Review - TOP Derivatives Exchange for Traders (2022)

BitMEX (short for Bitcoin Mercantile Exchange) is one of most popular futures exchanges for advanced traders and speculators. It is also known as one of the first crypto derivatives exchanges to trade Bitcoin leverage. It is important to realize that leveraging is highly risky. Therefore, it must be handled with care, especially with BitMEX, where margins can increase up to 100 times. BitMEX began operations in 2014 and is headquartered in Hong Kong. Security is a top priority at BitMEX and the stock exchange has not seen any hacks yet. In addition, it offers the lowest bitcoin margin trading fees and has a relatively seamless registration process, but KYC is a must. The platform has a clear user interface and an easy-to-use dashboard, but it can be confusing for beginners. If you are entering the cryptocurrency sector, it may be better to start with a simpler exchange.

Basic information

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BitMEX reviews

The BitMEX exchange is mainly about trading in cryptocurrency derivatives. Currently, users can trade:

• Futures contracts. Agreements to buy or sell cryptocurrencies at a predetermined price at a certain date in the future.
• Perpetual contracts. These contracts are like futures, but they do not have a predetermined expiration date, so you can hold them for as long as you want or until your position is liquidated.
• BitMEX UP & DOWN contracts. These are option contracts that allow traders to participate in the potential rise or fall of the underlying asset. Users can speculate on the price of Bitcoin on a particular settlement date and receive or pay the difference for a guess right or wrong. The UP and DOWN contracts cannot be short-circuited and will expire prematurely if the price touches or falls below the predetermined KO barrier price. Helps users reduce potential losses.
• Quanto futures contracts. These contracts, offered on the platform in US dollars and tethers, are designed to expose to the asset price in USD or USDT without having to directly hold either USD / USDT or the asset itself.

Other benefits of BitMEX include:

• Up to 100x leverage for certain contracts denominated exclusively in Bitcoin.
• Very active customer support. Unlike most companies in this sector, BitMEX offers several 24/7 customer support channels. In addition to e-mail support and a comprehensive knowledge base, the help desk can be contacted via Weibo, Wechat, IRC, Twitter and Reddit. It takes BitMEX about an hour to answer the question.
• Professional and safe stock exchange. The BitMEX interface is fully customizable and adapted for professional traders. The platform is highly secure and uses multi-signature cold storage, two-factor authentication, PGP email encryption and full risk control for each user's store.
• Complex types of commands for different business strategies. BitMEX users can enter limit, market, stop market, stop limit, trailing stop, take profit, hidden, iceberg, post-only and close-on-trigger commands.
• BitMEX test network. Margin trading usually involves a high degree of risk, so beginners should know what they are doing before trading. If you are willing to learn, you can try BitMEX Testnet. It is a 1: 1 copy of the mainnet (but with a separate index) running on fake BTCs. This is a place where you can get acquainted with the platform before registering on the main network.

History

BitMEX was founded in 2014 by Arthur Hayes, Ben Delo and Samuel Reed with funding from family and friends. It is registered in the Seychelles and operates from Hong Kong. In 2016, the Exchange introduced perpetual futures, which became its most popular derivative product, and the Exchange became one of the most well-known exchanges with bitcoin derivatives. In 2018, Delo became the first and youngest bitcoin billionaire in the UK.

In July 2019, Nouriel Roubini, a critic of cryptocurrencies, said the stock market was involved in illegal activities that allow traders to take too many risks and trade against other clients. Two days later, the Commodity Futures Trading Commission (CFTC) began investigating BitMEX for violations by allowing Americans to trade on the platform.

On October 1, 2020, Hayes, Reed, Delo, and Gregory Dwyer were charged with violating the U.S. Banking Secrecy Act and a conspiracy to violate the law, stemming from allegations that the four had not implemented anti-money laundering measures.

Nevertheless, BitMEX has maintained its position and demonstrates its commitment to the growth of the cryptographic industry as a whole. The platform offers a program Open Source Developer Grant, which funds research on improvements related to Bitcoin, NodeJS, Java and Kubernetes.

BitMEX is not a typical crypto-to-crypto or crypto-to-fiat exchange and is not intended for beginners. If you are not an experienced trader, you will need to intensify your game and learn a lot about how to use it and what risks to take. First, you will not trade cryptocurrencies, but their futures contracts and swaps. Second, the platform only accepts Bitcoin and USDT, so you will not be able to use fiat currencies or altcoins.

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BitMEX charges

Trading fees always affect your profits, especially if your strategy involves trading large volumes. Like most exchanges, BitMEX charges maker / taker fees, which are activated whenever you place or receive an order. However, the fees for BitMEX creators are negative, which means that merchants will receive a discount of 0.01 % when their order is processed. Such an incentive stimulates the activity of market makers in order to avoid large price discrepancies. Fees for BitMEX recipients are 0.05 % regardless of the type of contract or coin you trade. For high volume traders, the platform offers discounted fees to recipients.

There are also futures settlement fees, which can be either 0% or 0.05%, depending on the pair, and long-term and short-term financing fees for perpetual contracts, but almost all of them are unique to a given contract. You can see them in detail here.

In addition to the main fees, there are other fees for premium features such as hidden or iceberg orders. In the case of a hidden order, the recipient fee always applies, while in the case of an iceberg order, the recipient fee applies until the hidden amount is settled, and then it is linked to the creator fee for the uncovered quantity.

In addition, BitMEX does not charge deposit and withdrawal fees, but there is a dynamic bitcoin network fee, which is usually 0.001 XBT - XBT is one of the two bitcoin codes, with BTC being the second. Although BTC is an increasingly popular term, XBT is better suited for its potential as a global reserve currency. X in XBT refers to any asset that functions as a "supranational" currency that is not tied to any particular country border, similar to XAU for gold or XAG for silver.

Compared to other margin trading platforms such as Bitfinex or eToro, BitMEX offers the highest leverage at the lowest price for traders with lower trading volumes. BitMEX is one of the few exchanges that offers negative fees for market makers, and deserves the title of trading platform with the lowest fees.

BitMEX manual

Registration

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Opening an account on BitMEX is a breeze. First go to the homepage of the stock exchange and click on the "Regiser" button in the upper left corner next to the item "Log-in"

Once you have filled in your personal data and verified your e-mail, you can log in to the platform and secure it with 2FA. Go directly to the upper left corner, click on the user silhouette icon and go to the "Security center" section.

Once there, select your preferred two-factor authentication and follow the instructions. Then you have to go through the KYC process. BitMEX user authentication is required for all users before completing the first deposit, trade or withdrawal.

The user authentication program requires that individual users on BitMEX go through a four-step process. Individual users are asked to upload a photo ID and proof of address, take a selfie, as well as answer a few questions about the source of funding and trading experience. It takes about five minutes to complete from start to finish.

When you're done, you're ready to make your first deposit! You can do this by going to the account section and selecting the green "Deposit" button.

Once you have deposited your funds, you can start trading.

Trading on BitMEX

BitMEX has an intuitive and efficiently designed dashboard that can be customized to your preferences. Displays all necessary options, including TradingView charts, order book, recent trades and order bar. For a regular trader, that should be fine, but for a beginner it can be a little overwhelming.

Widgets on the platform can be customized to your display preferences. On the left you can choose your preferred order type, quantity and level of leverage. Once you specify the variables, the widget automatically calculates the order price, liquidation price, and other relevant order information.

As mentioned above, BitMEX offers many ordering options:

• Limit - An order to be executed as soon as the market reaches the chosen price.
• Market - An order that is executed immediately at the current market price.
• Command Stop Limit - It specifies the worst entry price we are willing to accept. Stop order that enters the Limit order when the market reaches the trigger price
• Stop Market - Stop order, which enters the Market order when the market reaches the trigger price.
• Trailing Stop - Command with set end value; works as a dynamic stoploss. The trader sets the maximum loss at which the transaction ends automatically. However, as long as the price moves in favor of the trader, the limits of the Trailing stop also move with the same speed and in the same direction. Therefore, if the rate increases by $ 1, the Trailing Stop limit will also move up $ 1. But if the market moves against you, the trailing stop boundary remains unchanged.
• Take Profit Market - An instruction to be executed when the market reaches the trigger price.
• Take Profit Limit - An order that sets a limit order to the trigger price.
• Hidden - The limit order is not visible in the public procurement book.
• Iceberg - An order that consists of two parts - one is visible in the public procurement book and the other is not.
• Post-only - The order is accepted only if it is not executed immediately. The order will only be written among the others and we will not buy from already existing orders. It is mainly used for shoes.
• Close-On-Trigger - The stop order ensures that the order closes open positions at the starting price and does not add new contracts in the opposite direction if you had several orders.

Speaking of the market price, it is determined by buyers and sellers on the stock exchange. BitMEX also uses its market index, which reflects the combined average market price of Bistamp, Coinbase Pro and Kraken.

Once you have selected your preferred trading tool and placed your order, you can view it at the bottom of the dashboard by clicking on the "Active orders" window.

Leverage on BitMEX

Leverage allows users to enter orders that exceed the user's current account balance. It can potentially lead to higher trading profits, but also increases the risk of liquidating a position or account balance. BitMEX allows traders to use their positions up to 100 times leverage. However, it is not a fixed multiplier, but rather a minimum capital requirement. It is determined by the level of the initial margin and the maintenance margin. The initial margin is the amount you must deposit to open a position; Maintenance margin is the amount you must hold to keep a position open - if your margin balance on the stock exchange falls below this point, your open positions will be automatically liquidated.

The initial margin on BitMEX ranges from 1 % to 5 % depending on the asset, while the basic maintenance margin is between 0.35 % and 2.5 %. The basic risk limit is 50 XBT for almost all contracts, with the notable exception of two specific XBT contracts and the ETHUSD contract, for which it is 75 XBT, and the XBTUSD contract, where it is 200 XBT.

Inexperienced players should study and learn more about the leverage of BitMEX, but it will be clear to experienced traders. If you are a beginner who has decided to try the stock market, BitMEX Testnet is a great place to start learning.

Other BitMEX products

BitMEX earn is a new product line that gives you the opportunity to get high returns for HODLing your cryptocurrency. The product allows you to earn interest on Bitcoin and Tether deposits.

You can also use Crypto Converter to transfer your assets immediately to another BitMEX-supported coin at no charge.

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Deposits and withdrawals

Bitcoin and USDT are the only cryptocurrencies that can be traded. Bitcoin is a fuel platform because it is used to secure trade and fees. The minimum amount you can deposit is 0.001 XBT. As of mid-2020, BitMEX users are required to go through the KYC process, which involves providing a government-issued photo ID and a selfie with that ID along with proof of address, as well as answering several questions about their source of funding and business experience. The whole process takes only a few minutes, while verification at the end can take several hours to days.

BitMEX does not charge users fees for deposits or withdrawals, but a small network fee of 0.001 XBT is charged for withdrawals. Due to manual processing of selections, they are sent only once a day around 13:00 UTC. The withdrawal process is as simple as it can be, all you need to do is enter the withdrawal amount and the address of your bitcoin or USDT (ERC20) wallet.

Overview of other stock exchanges and exchange offices you will find here

Safety

BitMEX security is extremely high, the stock market makes great efforts to maintain the level of security and is proud to have never been threatened by hackers. Security measures on the stock exchange are divided into four categories:

Wallets: All BitMEX wallet addresses are multi-signature, so even in the event of an extreme hack that compromises servers, trading engine and database, an attacker would not have access to the keys necessary to steal funds. All selections are also manually checked by staff and no keys are stored on the cloud servers that could be potentially vulnerable.

System security, engine security and communications security are also all based on highly sophisticated technology and several layers of defense.

BitMEX uses a combination of these security systems to protect the platform and its users:

• Amazon Web Services to protect platform servers.
• Manual selection checks are performed by at least two employees.
• Multiple forms of authentication for access to individual layers of the platform. These include hardware tokens and monitored communication channels.
• The BitMEX trading engine is written in kdb +, the language used by large banks for high-frequency trading applications.
• Full risk control is performed on each deposit, trade, withdrawal and settlement. If something goes wrong, the whole system can freeze.

In addition, users can secure their accounts with:

• Two-factor authentication (2FA).
• List of allowed IP addresses.
• PGP by encrypting emails.

Customer support

Customer support is provided both through a rich source of information available on the trading platform and on the company's website itself, and via e-mail. User reviews suggest that the response time to questions is good.

There is also a chat feature that allows merchants to talk to each other, which means that the BitMEX merchant community does a good job of solving most queries or problems internally without having to contact support personnel.

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.