“Derivative markets are important because their behavior influences the price dynamics of cryptocurrencies themselves,” says Nicolas Christin from CyLab Security and Privacy Institute.
Derivatives, similar to the stock market, are significant for the underlying digital asset and derivatives traders create a steady stream of income by simply trading derivatives. For a crypto derivatives trader, a platform where they can seamlessly trade with a wide range of cryptocurrencies is clearly important.
Enter BitMEX exchange. If you are wondering what is BitMEX, in this BitMEX review, we will touch upon BitMEX’s pros and cons, and even BitMEX tax reporting.
What is BitMEX Exchange?
BitMEX is a leading crypto derivatives exchange that allows investors and traders to purchase perpetual swap contracts and futures on a wide range of crypto tokens.
BitMEX, which is short for Bitcoin Mercantile Exchange, was founded in 2014 by Ben Delo, Arthur Hayes, and Samuel Reed to offer a sophisticated Bitcoin derivatives trading platform.
The Seychelles-based exchange quickly became a go-to leveraged trading platform for Bitcoin traders soon after its launch. What added to BitMEX’s popularity was the launch of its perpetual leveraged contracts on Bitcoin in 2016. As per this launch, traders were allowed to trade Bitcoin futures with a leverage of up to 100x and without an expiry date.
Connecting your BitMEX Address to ZenLedger For Your BitMEX Tax Reporting
As one of the most comprehensive cryptocurrency tax software options on the market, we have import instructions for well over 400+ exchanges.
Within ZenLedger, on the Import Transactions page and Exchanges tab, select the Exchange you want to import. Then you’ll see a table that outlines the possible methods. For many centralized exchanges, we support a direct API code import, while others may require a CSV import. Decentralized exchanges may require a wallet address.
To import your transactions from an exchange, simply navigate to the “Exchanges” tab of the “Imports” page. Select the exchange that you are looking to import, and instructions will be provided for that specific exchange!
Now that we’ve looked at what is BitMEX, let’s move on to the pros and cons of the exchange.
Pros and Cons of BitMEX Exchange
The P2P crypto trading platform gained popularity fast when it launched, but what are the pros and cons of this platform? Let’s find out:
Pros
- Professional derivatives trading platform: The platform is built by seasoned traders and offers a state-of-the-art crypto derivatives trading experience and pricing APIs.
- Up to 100x leverage: The exchange offers up to 20x to 100x leverage on the assets.
- Deep liquidity: If you are looking for the deepest liquidity for Bitcoin perpetual futures contracts, BitMEX is the right choice for you.
- Low trading fees: This exchange also saves you money as it has very low trading fees and a maker fee rebate.
Cons
- Only crypto-to-crypto trading: The users cannot use fiat currency for trading on the exchange.
- Lack of regulatory compliance: BitMEX has faced several regulatory compliance issues in the past and it continues to face them.
- Not available to US customers: The exchange is unregulated in the US and the citizens of the country cannot use it.
Trading Experience
As we mentioned earlier, the BitMEX exchange is famous for offering a state-of-the-art trading experience, but it is for trading veterans only. Experienced traders will find a wide array of features and trading strategies very helpful. Beginners, on the other hand, may struggle with the professional setup of the exchange.
Security
BitMEX has multi-signature wallets, contains all the funds in cold storage, and audits all the withdrawals. The exchange also deploys a multi-party computation (MPC) system, which allows two parties to complete a transaction and its information never leaving the domain. The exchange claims that hackers cannot steal the funds from the exchange because MOC prevents the hackers even if all the systems are compromised.
Opening a BitMEX Account
To trade on the BitMEX exchange, you’ll need to open an account on the exchange, which is fairly simple. Follow these steps to open an account:
- Go to https://www.bitmex.com and click on “Register” in the top right corner.
- Next, provide your email address and set a password.
- After this, you’ll need to provide your government-issued ID, your location, a selfie, a declaration of your citizenship, and the way you will fund your account.
Businesses can also create corporate accounts on BitMEX. It should be noted that the BitMEX exchange is not available in the US, Iran, Cuba, Syria, Sudan, North Korea, Crimea and Sevastopol, Hong Kong Special Administrative Region of the People’s Republic of China, Ontario Canada, Japan, Central African Republic, Western Sahara, Quebec Canada, Burundi, Democratic Republic of Congo, Palestine, Libya, Somalia, South Sudan, Guinea-Bissau, Mali, Bermuda, and Yemen.
Account Management
BitMEX has both a web-based trading platform and a mobile app for iOS and Android. The BitMEX mobile app doesn’t have all the features and products of the exchange, but it helps traders to manage their trading positions seamlessly on the go. Moreover, BitMEX’s corporate clients benefit from the features such as personalized solutions, consulting, institutional trading strategies, and 24/7 customer support.
To Summarize
Soon after the launch, BitMEX gained a lot of traction as a Bitcoin derivatives trading platform from professional investors mainly due to the fact that it provides 100x leveraged positions. This is mainly helpful for experienced traders as it is a highly professional crypto-to-crypto trading experience. For this very reason, inexperienced traders shouldn’t use BitMEX exchange as they might get overwhelmed by its advanced financial products and sophisticated trading dashboard.