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An in-depth look at BitMEX

Transactions via digital coins are becoming easier and more accessible thanks to crypto exchanges. These platforms paved the way for many people to engage in cryptocurrencies, boosting digital coins to mainstream appeal.

Popular and influential sites like Coinbase, Binance, Bitstop and CashApp have dominated the crypto market but are these your only options? Explore various exchanges to find one that suits your needs perfectly, and get to know what the BitMEX platform can bring to the table when it comes to crypto trading here at Cryptoshimbun!

What is BitMEX?

BitMEX or Bitcoin Mercantile Exchange was founded in 2014 by computer programmers Arthur Hayes, Samuel Reed and Ben Delo.

Currently, the company operates in Hong Kong and was incorporated under the International Business Companies Act of 1994 of the Republic of Seychelles. Hayes, Reed and Delo are still part of the company acting as the chief executive officer, chief technology officer and chief strategy officer respectively.

BitMEX is a peer-to-peer trading platform that offers services on leveraged contracts and cryptocurrency derivatives trading. It is focused on cryptocurrency contracts rather than trading the coins themselves among users.

This site is suitable for more advanced crypto traders and enthusiasts who are in the know of the latest trends in the cryptocurrency market. The BitMEX platform can be confusing for beginners to understand at first since it’s more focused on perpetual futures contracts.

Perpetual contracts

The most popular derivative product in the exchange is the perpetual contracts that the co-founders developed for the platform. According to the BitMEX website, it invented this cryptocurrency process called the perpetual swap that allows users to enter agreements to non-optionally buy or sell digital assets at an unspecified date in the future.

How to use BitMEX

BitMEX is used by crypto traders for margin trading and derivatives. Since the platform is designed to cater to the crypto derivatives market, it allows for seamless transactions for its main feature, the perpetual futures contracts.

This means that the contract derives its value from the performance of an underlying entity which in this case is cryptocurrency. These contracts are then bought and sold on margin trading wherein users can borrow additional cryptocurrency for leveraging.

What the platform offers

When trading for cryptocurrencies, one of the things you need to consider is the user interface. At BitMEX, a variety of advanced trading tools are available for you like advanced orders that automate your activity including:

  • Limit order – An order will only be fulfilled by the account when a specific price is reached.
  • Market order – Trading will be executed at the current market price.
  • Stop limit order – An order will only be filled once the stop price has been triggered.
  • Stop market orders – Allows an order to be placed even if it isn’t visible in the order book only when the market reaches a specific price.
  • Trailing stop order – Triggers a market order when it fulfils a specified trailing value.
  • Take profit limit order – An order will only be filled when a specific take profit price is reached.
  • Take profit market order – An order will only be filled when the take profit reaches market price.

Available contracts

BitMEX offers different contracts for its users to utilise in trading activities including:

  • Futures contracts – These are traditional futures contracts that allow users to buy and sell currencies at a predetermined price at a specified time in the future.
  • Perpetual contracts – Similar to traditional futures contracts, users are allowed to buy and sell currencies at a predetermined price but there isn’t an expiration date for the transaction. It trades close to the reference price index.
  • Upside profit contracts – Users are allowed to trade and participate in the potential upside of the underlying instrument of a contract featured in the platform.
  • Downside profit contracts – The process follows that of the upside profit contracts but users participate in potential downsides of the underlying instrument of a contract.

BitMEX only supports BTC transactions for its perpetual contracts as well as the upside and downside profit contracts. However, it allows trading traditional futures contracts of digital coins such as Cardano (ADA), Bitcoin Cash (BCH), Ether (ETH), Litecoin (LTC), Ripple (XRP) and Chainlink (LINK) among other altcoins.

BitMEX features


BitMEX wallets

A multi-signatory system is applied to the system’s deposit and withdrawal transactions. This allows the users to have an encrypted wallet to store altcoins without the fear of system compromise.

Even if the servers are hacked, attackers can’t easily access these wallets without proper keys and authentication.

System Security

A series of authentication processes are needed before you can access any of the BitMEX features on the platform.

This includes hardware tokens and information on your account. The individual systems on the site won’t be able to communicate with each other without proper authentication from the site and the user.

Trading engine security

The BitMEX database ensures that all orders and transactions are properly processed and approved by the user before being implemented. Its system has a multi-layered defence code that checks each order placement, trade, settlement, deposit, and withdrawal so that transactions are legitimate.

Communication security

BitMEX extends its security to automated emails done within the site. It’s powered by PGP encryption that gives messages ample protection from malware and hacks. This security feature only works on email messages you receive from the BitMEX support team.

Transaction fees

At BitMEX, the trading fees are computed through the maker and taker model that determines the cost of service through the type of order you utilise. This means that transactions are computed differently by the system.

Traditional futures contracts can give you a small compensation or rebate through the taker and maker model. For example, a BTC transaction has a 0.025% maker fee as a rebate and charges a taker fee of 0.075%. This also works on perpetual contracts but the fees depend on the transaction.

Moreover, deposits and withdrawals of BTC and other altcoins within the system do not charge you any fees at all. Whatever fee that occurs on transactions depends on the blockchain that the select cryptocurrency is operating on.

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