Bitmex

BitMEX Exchange

The Giant of Crypto Derivatives

Introduction

Over the course of the last decade, Bitcoin has emerged as a highly lucrative asset for investment. Bitcoin’s surging popularity over the years consequently paved the way for the emergence and prominence of other types of cryptocurrency too, including the likes of Ethereum and Ripple. For the majority, investing in cryptocurrency simply means exchanging their fiat money to purchase a definite amount of cryptocurrency, with the expectation that the increased demand for them in the market would lead to increase in the prices and thus consequently lead to a good increment in their capital over time. In fact, most cryptocurrency exchanges actually run to accommodate this sort of investment. But the investment and growth potential of cryptocurrencies are now increasingly being realized in other avenues as well. From direct loan and interest opportunities to margin trading, companies and individuals are increasingly leveraging upon the scope of cryptocurrency as an investment tool. One of the early movers and currently among the biggest facilitators and beneficiaries of this alternative investment system is Bitmex.

Bitmex calls itself ‘a derivatives exchange that offers leveraged contracts that are bought and sold in Bitcoin’. The exchange operates in much the same way as a traditional commodity exchange or a stock exchange would.  However, unlike traditional exchanges, each and every transaction from the exchange primarily involves the use of Bitcoin, rather than any kind of fiat currency or a physical commodity. Bitmex is also a globally accessible platform, which is registered in Seychelles and maintains in major operations from Hong Kong. The exchange started its operations in 2014, under the full ownership of a company called HDR Global Trading Limited that was primarily backed by three former bankers including Arthur Hayes, Ben Delo, and Samuel Reed. Currently, Hayes is the CEO of Bitmex. The company claims that every day, it handles over a billion dollars worth of transactions in Bitcoins.

The Service Platforms

Bitmex officially offers its services only through its website. Although there are third-party apps that have been built using Bitmex’s API, the company still hasn’t released its official apps. However, Hayes has announced through Reddit that official apps were in development and would be available soon.  Although Bitmex is a global platform, it’s not usable in a few countries, most notably the US. Users need to understand that Bitmex isn’t a platform that supposed to be used just for holding cryptocurrencies (although that is indeed possible).

Users need to be quite aware of how derivative exchanges actually work and what are the risks of the trade for profiting from the platform. Fortunately, Bitmex offers a dummy trading service as well, with which you can practice trading without actually losing any money. By signing on to a test account through https://testnet.bitmex.com, you can practice with the system with real-time data and know whether you can really profit through Bitmex or not. Initially, all users are given a dummy amount of 0.1XBT to experiment.  

For its transactions, Bitmex uses a trading software written in kdb+ that is also being used in major stock exchanges around the world like NYSE and Nasdaq for high-frequency trading. Through this software, over a million transactions can be performed every second in the exchange.

Platform Security

Bitmex employs some of the best industry security standards in its platform that is also constantly monitored by IT security professionals. It is because of this standard that users can trade on the platform at any time of the day, from all over the world. Wallets in the exchange are secured with multisignature deposits and withdrawals, because of which only the signatories can approve the transactions. All user accounts are secured with two-factor authentication, while the server is secured with the latest AWS systems.

Registration Process

Screenshot Bitmex Register

Compared to many other exchanges, the signup process is very simple. One of the major advantages of using this platform is the ability to do anonymous trading. Many bitcoin exchanges currently require extensive identification and financial details of their users. But because there is no fiat currency involved in receiving and depositing funds with this exchange, it’s out of the reach of the mainstream banking system and authorities. You will, however, need to use other exchanges or P2P systems to transfer your funds to and from your Bitmex wallet. For signing in to Bitmex users only need to provide an email address and later verify your location. Unless you register from countries that are on the exchange’s restricted list, you can start transferring funds to their account and begin trading promptly.

Trading process

To any new user, the interface of Bitmex can prove to be really confusing. But once you get habituated through the test accounts, you can easily track all your transactions with the help of very intuitive figures and charts. Like most mainstream derivative interfaces, the interface of Bitmex allows users to observe the relevant data through candlestick and depth charts, trading volume and technical indicators.

Bitmex allows its users to take two kinds of contracts, which are Futures Contracts and Perpetual Contracts. In simple words, a futures Contract allows users to buy or sell a specified amount of assets (cryptocurrency or fiat currency in this exchange’s case) for a mutually agreed price within a stated deadline in the future. On the other hand, the perpetual contract doesn’t include any deadline. Expert users, in particular, make use of the leverage trading system where one can even trade as 100 times their current asset position in maximum. But the higher the leveraged trading, the higher is the risk. In perpetual contracts, the exchange charges -0.0250% for the taker and 0.0750% for the taker with a leverage of 1:100. For traditional future contracts, the exchange charges specific rates depending upon the currency.

The exchange allows its users to trade their balance of cryptocurrency against the price of several fiat currencies (like the US Dollar, the Japanese Yen and the Chinese Yuan) and many kinds of cryptocurrency like Bitcoin, Bitcoin Cash, Cardano, EOS Token, Tron, Dash, Ethereum, Litecoin, Ethereum Classic, Monero, Ripple, Tezos and Zcash. Most mainstream exchanges have transaction and withdrawal limits on their platforms. However, at Bitmex there are no such limits at all: as long as your deposits and withdrawals are in Bitcoins, you can unlimited transactions.

Support and Customer Care

Bitmex has a very responsive customer care service, which can be reached through their email ticket system. Their Reddit sub (www.reddit.com/r/bitmex) is also very active and can be used to take suggestions from users, as well as, official exchange representatives. Users can also reach them via Facebook and Twitter.

Blockledge’s verdict

If you are confident that you can deal with the complexities of derivative exchanges, then registering with Bitmex to trade your Bitcoin would certainly be a good idea. The only major downside of using the platform is the inability to withdraw or deposit directly with fiat currency, meaning that you will need to depend upon third-party services to bring your Bitcoin balance to the platform. But on the other hand, this very exclusion from the mainstream financial system has meant that users can trade with anonymity and without any transaction ceilings. For derivative trading enthusiasts, this exchange certainly offers a lot of advantages.

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