BitMEX (stands for Bitcoin Mercantile Exchange) is a cryptocurrency trading platform for experienced bitcoin traders. On BitMEX, professional crypto-traders can engage in bitcoin margin trading, making the of their crypto assets. This guide will give you a detailed BitMEX review exploring this trading platform with all its pros and cons.
How BitMEX Started
Back in 2014, in Victoria, Seychelles, a group of talented experts in web development, finance, and trading, launched BitMEX under their company. The company was HDR Global Trading Limited, named after its creators Arthur Hayes, Ben Delo, and Samuel Reed.
What BitMEX Offers
Being a platform for derivative trading, BitMEX specializes in margin trading. What that means is that on BitMEX, you don’t trade cryptocurrencies themselves – you trade contracts with an assigned cryptocurrency price. Also, BitMEX allows users to affect their trade, reaching a 100x leverage boost.
When engaging in this type of trading, one must be very careful. Margin trading is volatile, which means that it may allow a trader to earn huge money with lesser investment, but at the same time, one may lose all the investments in an instant.
If what we say makes next to no sense to you, you should avoid using BitMEX for crypto trading. We must remind you that this cryptocurrency derivatives trading platform is for experienced crypto traders only.
Contracts that BitMEX exchange offers
A traditional futures contract is a type of contract that obliges a trader to buy or sell cryptocurrencies at a certain price and at a certain moment in the future.
Perpetual contracts are pretty much like futures contracts, with the main difference being that these contracts have no expiration date.
Upside profit contracts & downside profit contracts
a) The first type of contract lets a trader take part in the upside of a currency. Paying a premium on the date of a trade, a trader will then earn the difference between the cryptocurrency price and strike price with the positive outcome of the trade. Otherwise, there will be no payment.
b) With downside profit contracts, on the contrary, traders take part in potential downsides of currencies.
Where BitMEX Services are available
In 2014, Arthur Hayes, Ben Delo, and Samuel Reed registered BitMEX (owned by HDR Global Trading Limited) in Virginia, the Republic of Seychelles. Now, BitMEX is a globally available leverage trading platform. However, there are places that are not included in the BitMEX supported countries list.
You cannot use BitMEX exchange services in:
- the USA
- Provinces of Ontario and Québec (Canada)
- the Republic of Seychelles
- Crimea (including the city of Sevastopol)
- North Korea
- Hong Kong
However, a number of web technologies will allow users to access BitMEX from any of the unsupported regions. But it should be noted that trading on BitMEX from an unsupported territory may cause legal repercussions in accordance with the territory’s laws.
Payment methods and currency policy
The BitMEX leverage trading platform supports only cryptocurrencies, with the main crypto-currency being Bitcoin. But besides Bitcoin on BitMEX exchange, traders can use other alternative coins:
When trading with Bitcoin and Ethereum, traders can work with spot & futures order types. Other cryptocurrencies only support futures trading options.
There is no fiat currency support since this exchange platform only works with Bitcoin as the main cryptocurrency. All your earnings and losses are displayed in Bitcoin. You will see your trading statistics in Bitcoin even if you are using other crypto coins. BitMEX makes deposits and withdrawals only in Bitcoin, as well.
BitMEX crypto exchange offers very user-friendly trading fees. For most cryptocurrency traders, the fees may even look ridiculous when compared to the huge profits that an experienced and careful trader may expect.
The taker fee on the BitMEX crypto exchange equals 0.0750%, and the maker fee can reach a negative value of -0.0250%. That means that when trading on BitMEX, a maker may even get a refund.
For more details on the BitMEX fees, follow the link.
Deposits and withdrawals
Depositing and withdrawing assets in the BitMEX network is free of cost for every operator. There are no hidden costs for trading.
If you want to know more about the Bitcoin network fees, check out this link.
As you see, the BitMEX fees policy seems very appealing, especially if you compare it to the fees on other crypto exchanges where they may reach 0.25%.
BitMEX Customer Support
Users may address the BitMEX customer support team for help via email or using a built-in chat. By the way, the BitMEX chat functionality also allows exchange users to talk to each other.
BitMEX website delivers a good user experience. It has loads of useful information and features. Users can educate themselves on the intricate trade nuances and get a detailed rundown of the whole exchange on the support center page. There are also live update notifications that keep users informed about the latest updates within the exchange.
The platform’s website is also great in terms of security. BitMEX is open for inquiries, and users can find out all the necessary information about who runs the platform and how the funds are secured. BitMEX also provides a multi-signature withdrawal service, cold storage, and an Amazon Web service for the best trading security. All of these make BitMEX one of the most secure trading platforms today.
Because BitMEX does not have a huge customer base, you will hardly find too many customer reviews about this exchange on sites like Trustpilot. One of the reasons might be that margin trading is not too popular because of how difficult it may be to understand. On the other hand, you will not find anything horrible about BitMEX, either.
BitMEX and Other Cryptocurrency Exchanges
However, BitMEX is not the only trading exchange platform for traditional futures markets. Its closest rivals in that field are the Bitfinex and OKCoin exchanges. These are the platforms that some traders would choose as alternative options to BitMEX. But what should be taken into account is that BitMEX has a number of differences that set this cryptocurrency trading platform apart from its rivals:
- BitMEX offers a lower margin and smaller contract amount, which results in more profitable leverage – on BitMEX, traders can get a 100x leverage. However, it is fair to say that Binance Futures offers even a 125x leverage with quite similar trading options.
- On BitMEX, margin calculations are executed using index price rather than the last traded price. This results in a higher security level for trading since no one will be able to manipulate the order book and compromise trades;
- With the Leverage Slider, BitMEX users can choose leverage level. They can even edit it manually while in position.
For more information on BitMEX and its competitors, follow the link and make your own research on the “BitMEX vs. Competitors” page of the BitMEX official website.
BitMEX in a Nutshell
1) BitMEX is a professional crypto trading exchange platform for experienced traders.
BitMEX trading engine specializes in margin trading, also referred to as leverage. This means that on BitMEX, users don’t buy or sell cryptocurrencies – they only trade cryptocurrency contracts.
Margin trading on the BitMEX platform is executed through a number of contract types:
- Traditional futures contract
- Perpetual contract
- Upside profit contract
- Downside profit contract
- Margin trading (leverage) may seem too intricate for most traders (especially beginner traders), which is why it is not recommended to use BitMEX if you lack knowledge and experience in margin trading.
2) The main cryptocurrency is Bitcoin.
BitMEX uses Bitcoin for all operations, such as depositing and withdrawing. Users’ earnings and losses are also displayed in Bitcoin. Bitcoin is also used for all trading statistics inside the BitMEX platform.
However, the BitMEX platform supports other popular cryptocurrencies such as Bitcoin Cash, Litecoin, Ethereum, Ripple, Cardano, etc.
3) In terms of security, BitMEX is fully transparent and safe to use.
The platform also has a dedicated customer support team. There is also a built-in chat that allows traders to not only address the platform’s customer support but talk to one another.
4) The BitMEX platform services are available globally. However, there is a list of countries and regions where the platform is banned.
These places are the USA, Provinces of Ontario and Québec (Canada), the Republic of Seychelles, Bermuda, Crimea (including the city of Sevastopol), North Korea, Hong Kong, Cuba, Iran, Syria, Sudan.
The Pros and Cons
We will finish our BitMEX review with a quick recap of why this leverage platform will be or will not be good for you.
- BitMEX was created by professionals for professionals
- The platforms deliver a smooth trading experience with high-security standards
- The platform’s trading engine is designed with the similar technology used by investment banks
- Allows a user to boost leverage up to 100 times
- Offers low fees and potentially high profitability
- Always keeps traders informed about updates and other features
- It has a functional built-in chat
- The platform is NOT suitable for newcomers (if you are not familiar with leverage, try looking for a simpler crypto exchange to trade on)
- Does not have a mobile app
- It May is not suitable for the US residents
If you still question about the BitMEX leverage exchange platform, you may find answers to them in a FAQ section below.
Is BitMEX a legal platform?
It is a legal platform owned by HDR Global Trading Limited. HDR Global Trading Ltd. is registered in Victoria, Seychelles.
Is BitMEX safe?
BitMEX is deemed one of the safest crypto platforms to trade on due to its high-security standards. BitMEX also has a professional customer support team and functional built-in chat where traders can also communicate with each other.
What is the insurance fund?
The insurance fund is a safety limit that stops the trade in the case when the loss is becoming larger than the fund’s amount.
Can the US residents use the BitMEX leverage platform?
Unfortunately, living in the USA, you cannot trade on BitMEX by default. But you can use certain technologies to be able to access the BitMEX website. Since this is not 100% legal to do so, you are fully responsible for your actions – including legal responsibility.
Why is BitMEX banned in the US?
BitMEX website is blocked in the USA because of the country’s strict futures trading regulations. The reason is that Bitcoin is an unregulated currency. In the USA, all trading platforms must have a broker’s license in order to provide trading services. BitMEX does not have such a license.
Is BitMEX legal in India?
According to the platform’s blog, you can trade on this exchange in India. Its status is specified as “Operational.”
Where else is BitMEX banned?
You can’t legally trade on BitMEX in the following regions: USA, Provinces of Ontario and Québec (Canada), Seychelles, Bermuda, Crimea (including the city of Sevastopol), North Korea, HongKong, Cuba, Iran, Syria, Sudan.
In 2021, it is impossible to trade on BitMEX in the United Kingdom. On January 12th, 2021, digital currency derivatives trading was banned in the UK.
Does the platform have a mobile app?
There is no mobile application that would allow users to trade on Bitcoin Mercantile Exchange from their mobile devices. To be able to trade on BitMEX, you need an account on the exchange’s website.
How to trade on BitMEX?
- Register to create your trading account
- Perform the account verification process
- Deposit funds to your account
- Go to the trading interface
- Edit your position
- Set your leverage
- Check your transaction details
- Open your position