The infrastructure in the cryptocurrency industry is actively developing, each year new exchanges appear on the market. Many new sites offer favorable conditions for traders, but at the same time, they cannot guarantee a high level of security. With such a huge variety it is very difficult to make the right choice not only for novice traders but also for more experienced players. In this article, we will look at a successful trading platform, so this is a review of the BitMEX cryptocurrency exchange.
A bit of history
This site was founded back in 2014 by trader Arthur Hayes. BitMEX office is placed in Hong Kong. This exchange was created with the view of professionals. The fact is that BitMEX has a huge number of functions and additional features. For example, this platform is one of the first to introduce margin trading in the market.
At the moment, a BTC/USD can be traded with 100-fold leverage. This means that by risking your own $100, you can make deals worth 10,000 US dollars. Of course, this is very risky, since fluctuations in the asset’s rate just 1% below the open position will lead to complete loss of funds. In the cryptocurrency market, 1% volatility can occur in literally 1 minute, so using such leverage is rather rash. In other currency pairs, the maximum margin is lower – 50, 25 and lower, but this is still a lot more than on other exchanges.
In addition, BitMEX was one of the first to start supporting Bitcoin futures, which ensured a large influx of customers and trading turnover, respectively. After that, futures for other cryptocurrencies (BCH, EOS) were introduced on the site.
Now BitMEX believes that such a tool as futures is outdated in the cryptocurrency market, so they want to switch to other traditional derivatives. For example, in the next year and a half, they plan to introduce options.
What is the exchange BitMEX now?
After the recent hack of the Binance exchange, the BitMEX platform took the first place in terms of trading volume, according to data from the Coinmarketcap website, the daily turnover of this exchange is almost 5 billion US dollars.
BitMEX is the indisputable leader in terms of the number of derivatives:
- Contracts for the fall or growth. With the help of this tool, it is possible to earn money by predicting which way the asset rate will go.
- Perpetual contracts.
- Futures on several top coins.
It is also worth remarking the wide margin trading opportunities. The exchange may impose restrictions based on the individual characteristics of a single trader. For example, professional users who operate on smaller volumes can easily count on maximum leverage. Novice traders will be a bit limited in this matter.
A large number of supported derivatives negatively affects the number of available coins. Until recently, there were 12 of them, but now only 8 remain BTC, BTC, ETH, LTC, BCH, XRP, EOS, TRX, ADA. Representatives of the exchange explain such a short list of digital coins by the fact that derivatives are a rather risky tool in the cryptocurrency market, so they use them with the most liquid and stable cryptocurrencies. According to the creator of the exchange, in the next couple of years, they are not going to revise the list of supported coins, they want to direct all their strength to the development of derivatives.
Advantages of BitMEX
Let’s review the strengths of this cryptocurrency platform.
- A huge number of trading tools.
- Many trading opportunities that are rarely found in one place.
- A universal functional interface that can be easily customized based on own preferences.
- A simple and clear system of commissions.
- High work speed. The trading terminal is written by hand using the kdb+ programming language. This allows working with the exchange, even on weak computers and mobile devices.
- The presence of a demo version. For those who do not want to trade real money immediately, there is a demo version, in which almost all functions are available. It should be noted that this is a very important function, which will be useful not only for beginners but also for experienced traders, for example, for developing new trading strategies.
- Generous referral program. The exchange pays up to 10% of operations of attracted traders.
- Huge knowledge base. There are explanations of the features of working with various tools in a personal account.
- High liquidity, which is achieved through a large turnover and a small number of traded pairs.
Disadvantages of BitMEX Exchange
Any tool has its strengths and weaknesses. Let’s discuss in more detail the disadvantages of this cryptocurrency platform.
- Pretty complicated interface. Due to the huge number of supported trading tools, the BitMEX trading terminal may seem complicated at first glance. It is worth noting that most of the negative reviews relate to the fact that new users did not understand how to trade quickly. This is mostly true for margin trading with large leverage.
- Dependence on BTC. The fact is that the replenishment and withdrawal of funds from the exchange is possible only through Bitcoin cryptocurrency. Because of this, traders way or another have to acquire BTC and also to become attached to the fluctuations of its rate, even if they did not plan to do this. Not everybody trade in the first cryptocurrency, many traders prefer Altcoins, but the user of BitMEX will have to buy BTC in any case in order to take profits. This nuance has been worrying customers of the exchange for a very long time, so they repeatedly asked the representatives of the exchange to add at least one more coin. But, unfortunately, BitMEX is categorical in this subject, so waiting for the support of another coin for external operations is not worth it. The reason for it may be the fact that the site works semi-legally and does not have the opportunity to fully cooperate with financial institutions.
- Random account blocking. Some not logical events can occur at BitMEX sometimes. One of the most well-known cases occurred with the trader Tony Weiss. His account was blocked on the second day after the publication of the referral link. It is worth noting that the trader was allowed to withdraw his own funds, with the exception of those that were earned on the referral program. According to the official version, his account was blocked due to the fact that Weiss has a US passport, while citizens of this country are not allowed to trade on BitMEX. It is worth remarking that this story is not the only one, which, of course, does not make this platform a scam, but makes to doubt.
How safe is BitMEX exchange?
As practice has shown, no cryptocurrency platform can be called completely safe, but there are still a number of criteria by which one can assess the degree of security of a particular stock exchange. It should be noted that BitMEX has a fairly high level of security, as the site possess:
- two-factor authentication;
- storing about 99% of user funds in cold wallets;
- technical security, which is achieved through the already mentioned programming language kdb+.
It is also important to note the fast and fairly responsive support service, which quickly solves the problems that appear. Not a single bitcoin was stolen from this exchange in the entire history.
Based on the foregoing, let’s make conclusions, and it is up to you to decide if to use the exchange or is it better to pay attention to other cryptocurrency platforms.
- BitMEX is ideal for those traders who wish to use derivatives since the largest number of them is collected here.
- The exchange has a rather complicated interface that will not be easy for the beginner traders to figure out, so this platform is not suitable for novices.
- But at the same time, BitMEX offers a demo version in which it is possible to practice before moving on to real trading.
- Binding to Bitcoin, since all external and internal operations are performed exclusively by means of BTC.
- High level of security – there has been no hacking for 5 years.
In general, this exchange has a huge number of advantages, but also it is not without flaws. The choice of the trading platform is individual, so after reading this information, decide for yourself whether BitMEX is suitable for your needs or not. If you have never been engaged in trading before, it is better to pay attention to other platforms, but if you have at least some experience, then BitMEX is an excellent tool for cryptocurrency trading.
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