BitMEX Review 2024: Derivatives Exchange Analyzed

BitMEX, established in 2014, is a well-known cryptocurrency exchange that has made a name for itself in the world of derivatives trading, offering high leverage for speculating on crypto price movements.

While the platform provides low fees and advanced trading features, it has faced regulatory challenges, particularly in the U.S., which has affected its reputation in specific markets.

Despite these issues, BitMEX remains popular among traders for its professional environment, though its selection of supported assets is more limited than that of some competitors.

Weighing its strengths and potential drawbacks is essential when considering BitMEX for your trading needs.

Product Offerings: What Is BitMEX Exchange All About?

BitMEX offers a range of cryptocurrency trading products for experienced and novice traders. The platform’s offerings span futures, spot trading, staking options, and NFT-related services.

BitMEX Futures

BitMEX’s future products are a cornerstone of its offerings.

You can trade perpetual contracts that don’t have expiry dates and closely track the underlying asset’s price. Traditional futures contracts with set expiration dates are also available.

A key feature is the high leverage offered, up to 100x for Bitcoin futures.

This means you can open positions much more significantly than your account balance. For example, with $1,000 and 100x leverage, you could potentially control a $100,000 position.

Be cautious, though – while high leverage can amplify profits, it also magnifies losses. BitMEX uses a marked price to prevent unnecessary liquidations during short-term price spikes. To know more, check this guide on how to leverage trade crypto on BitMEX.

Spot

BitMEX has recently expanded its services to include spot trading. This allows you to buy and sell cryptocurrencies directly at current market prices.

The spot trading platform is newer and less developed than BitMEX’s futures offerings. You’ll find a more limited selection of trading pairs than other significant exchanges.

Spot trading on BitMEX doesn’t offer leverage. It’s designed for straightforward buying and selling of cryptocurrencies.

Staking

BitMEX’s staking options are limited compared to some competitors. You can earn rewards by holding specific cryptocurrencies in your BitMEX wallet.

Available staking options may change, so check the current offerings on the platform. Staking typically involves locking up your assets for a set period to earn additional tokens.

Rewards and lock-up periods vary depending on the specific cryptocurrency and current staking terms.

NFTs

BitMEX has shown interest in the NFT space, but its offerings in this area are not as developed as its trading products.

You might find occasional NFT-related promotions or events on the platform. However, BitMEX doesn’t operate a full-fledged NFT marketplace like other crypto exchanges.

Keep an eye on announcements from BitMEX if you’re interested in NFT offerings, as this area could expand.

 

BitMEX Supported Coin List

BitMEX offers derivatives trading for a select group of cryptocurrencies. The platform supports eight significant digital assets for trading purposes.

Here’s a list of the supported cryptocurrencies on BitMEX:

• Bitcoin (XBT)
• Ethereum (ETH)
• Litecoin (LTC)
• Bitcoin Cash (BCH)
• Cardano (ADA)
• EOS
• Ripple (XRP)
• Tron (TRX)

These cryptocurrencies form the basis for various trading pairs on the platform. You can engage in futures and perpetual contracts using these assets.

BitMEX is known for its high-leverage options. The leverage available varies depending on the trading pair. Here are some popular trading pairs and their maximum leverage:

Trading Pair	Maximum Leverage
XBT/USD	100x
ETH/USD	50x
LTC/USD	33.33x
XRP/USD	20x

It’s important to note that while these are the maximum leverage options, you can adjust the leverage according to your risk tolerance and trading strategy.

BitMEX focuses on derivative products rather than spot trading. This approach lets you speculate on price movements without owning the underlying asset.

 

BitMEX Order Types

BitMEX offers a variety of order types to suit different trading strategies. Market orders execute immediately at the best available price, while limit orders allow you to set a specific price.

Stop-limit orders combine a stop trigger with a limit order, activating when the market reaches your specified stop price. Take profit orders automatically close your position once a target price is reached.

Trailing stop orders adjust the stop price as the market moves in your favor, helping to lock in profits. Select your desired type from the dropdown menu on the trading interface to place an order.

For market orders, enter the quantity and click “Buy/Long” or “Sell/Short.” With limit orders, you must specify quantity and price before submitting.

Consider using market orders when you need immediate execution, such as during volatile periods. Limit orders help get better entry prices or set predetermined exit points.

Stop-limit orders can protect your position from sudden market moves. Try trailing stops to maximize gains on trending markets without constant manual adjustments.

BitMEX also offers advanced order types like iceberg orders for large trades and post-only orders to ensure you’re always a market maker. Experiment with different order types to find what works best for your trading style.

 

BitMEX’s Liquidation Mechanism

BitMEX employs a sophisticated liquidation system to manage risk in leveraged trading. When your position’s losses approach your initial margin, the liquidation process begins automatically.

The exchange uses a multi-step approach:

1. Partial liquidation
2. Full liquidation
3. Auto-deleveraging

You can set stop-loss and take-profit orders to protect your positions. These tools help manage risk before the liquidation engine activates.

Here’s an example of how liquidation works:

Let’s say you open a 10x leveraged long position on Bitcoin at $30,000.

Your liquidation price would be around $27,000. BitMEX will close your position to prevent further losses if the price drops to this level.

The liquidation engine aims to close positions gradually when possible. This approach helps minimize market impact and potentially salvage some of your remaining margin.

BitMEX’s system is designed to maintain a stable trading environment. It protects individual traders and the overall market from excessive volatility caused by overleveraged positions.

Remember, high leverage increases liquidation risk. Monitor your positions closely and use risk management tools effectively to avoid unexpected losses.

 

BitMEX Trading Fees

BitMEX employs a maker-taker fee structure for its trading fees. As a maker, you receive a rebate of 0.025% for providing liquidity to the market. When you act as a taker, you pay a fee of 0.075% for removing liquidity.

This fee structure is competitive compared to other major cryptocurrency exchanges. Many platforms charge higher taker fees, ranging from 0.1% to 0.2%.

Here’s a quick breakdown of BitMEX’s trading fees:

Role	Fee/Rebate
Maker	-0.025% (rebate)
Taker	0.075% (fee)

For high-volume traders, these fees can add up to significant savings. Let’s consider an example:

If you trade $1 million worth of cryptocurrency as a taker on BitMEX, your fee would be $1,000,000 x 0.075% = $750

On an exchange charging a 0.1% taker fee, the same trade would cost: $1,000,000 x 0.1% = $1,000

This represents a $250 saving on BitMEX for a single high-volume trade.

It’s worth noting that BitMEX doesn’t charge any fees for deposits. However, withdrawal fees apply and vary depending on the cryptocurrency being withdrawn.

 

BitMEX Funding Rates/Fees

BitMEX uses funding rates for its perpetual contracts. These rates help align the contract price with the underlying asset’s spot price.

Funding rates can be positive or negative. When positive, long position holders pay short position holders. When harmful, the reverse occurs.

The exchange calculates funding rates using two components:

1. Interest Rate
2. Premium/Discount to Spot Price

Funding payments occur every 8 hours. The rate is applied to your position size, not the margin used.

For example, if you’re long 1 BTC on the XBTUSD perpetual contract:

• Funding Rate: 0.01%
• Position Value: $50,000
• Funding Payment: $5 (0.01% of $50,000)

In this case, you’d pay $5 to short position holders.

BitMEX aims to keep its funding rates competitive within the industry. This helps attract liquidity and maintain fair market prices.

You can view current and historical funding rates on the BitMEX platform. This information can help you plan your trading strategy and manage costs.

Frequent position changes to increase her overall fees due to multiple funding rate applications.

 

BitMEX Deposit & Withdrawal Fees

BitMEX offers free crypto deposits, making it easy to fund your account. You won’t incur any fees when adding Bitcoin or other supported cryptocurrencies to your BitMEX wallet.

For withdrawals, the fee structure varies:

• Bitcoin withdrawals: No BitMEX fees, but network fees apply
• Ether withdrawals: Fees charged
• Tether (USDT) withdrawals: $25 fee

When depositing Bitcoin, you’ll receive a unique address for your account. Send your crypto to this address, which will appear in your BitMEX wallet after network confirmations.

Withdrawal times depend on network congestion. Bitcoin transactions typically process within 1-3 hours but can take longer during busy periods.

To withdraw, navigate to the withdrawal page and enter the amount and destination address. Double-check all details before confirming to avoid errors.

BitMEX dynamically sets the minimum Bitcoin network fee based on blockchain load. You can view the current fee on the withdrawal page before proceeding.

While BitMEX doesn’t charge for Bitcoin withdrawals, the network fee is deducted from your withdrawal. This ensures your transaction is processed promptly.

 

BitMEX Account Types & BitMEX KYC Tiers & Limits

BitMEX offers two main account types: Individual and Corporate. Individual accounts are designed for personal trading, while Corporate accounts cater to businesses and organizations.

To access BitMEX’s trading platform, complete the Know Your Customer (KYC) process. BitMEX employs a tiered KYC system with corresponding limits.

The Default Tiers are available to all users who complete the basic KYC process. These tiers determine your commission rates, ranging from 0% to based on factors like referred volume and market share 20%.

BitMEX’s KYC levels include:

1. Basic Verification
2. Intermediate Verification
3. Advanced Verification

Each tier comes with different deposit and withdrawal limits. Higher verification levels grant you increased limits and additional platform benefits.

To complete the KYC process, you’ll need to provide:

• Personal information
• Proof of identity
• Proof of address

BitMEX prohibits access for users from certain jurisdictions, including:

• United States of America
• Québec (Canada)
• Hong Kong Special Administrative Region

You can access BitMEX’s full range of crypto products and trading features by verifying your account. It’s important to note that trading cryptocurrency derivatives involves significant risks, so consider your financial situation carefully before starting.

 

BitMEX Trading Platform & Tools

BitMEX offers a sophisticated trading platform designed for experienced cryptocurrency traders. The interface integrates TradingView charts, providing you with professional-grade technical analysis capabilities.

Advanced charting tools allow you to customize indicators and draw trendlines. You can access real-time market data and order book depth to inform your trading decisions.

BitMEX’s risk management features include adjustable leverage, stop-loss orders, and take-profit functions. These tools help you control your exposure and protect your positions.

The platform provides perpetual swap contracts, allowing you to speculate on crypto price movements without an expiry date. You can go long or short on major cryptocurrencies like Bitcoin and Ethereum.

BitMEX’s order types include:

• Market orders
• Limit orders
• Stop-limit orders
• Take-profit orders

You might use the platform’s charting tools to analyze market trends and identify support and resistance levels. You can then set limit orders at these key price points to strategically enter or exit trades.

The BitMEX mobile app lets you monitor positions and execute trades. You’ll have access to real-time price and account notifications to stay informed about market movements.

 

BitMEX Insurance Fund

BitMEX maintains a substantial insurance fund to protect users’ assets during extreme market volatility. As of 2019, this fund held approximately 21,000 Bitcoin, valued at around $70 million.

The insurance fund serves as a buffer against unfilled liquidations. When a user’s position is liquidated, but the market price moves unfavorably before execution, the fund covers the difference.

You can find comfort in knowing that BitMEX’s insurance fund represents about 0.007% of their annual trading volume. This coverage helps ensure the platform’s stability during turbulent market conditions.

The fund operates alongside BitMEX’s auto-deleveraging system. It prevents forced liquidations of unfilled orders, maintaining market integrity.

BitMEX’s approach differs from that of some other crypto trading exchanges. While many platforms have insurance funds, BitMEX’s is notably large and transparent. You can easily track its size and usage through regular updates provided by the exchange.

In practice, the insurance fund activates when liquidated positions can’t be filled at the bankruptcy price.

For instance, if your liquidation price is $6,000 but the market only allows execution at $5,900, the fund covers the $100 gap.

This system protects both individual traders and the overall market from cascading liquidations. It’s a critical feature that differentiates BitMEX from cryptocurrency derivatives.

 

BitMEX Deposit Methods

BitMEX only supports cryptocurrency deposits. You cannot directly deposit fiat currencies on the platform.

To deposit funds, navigate to the “Deposit” page in your BitMEX account. Select the cryptocurrency you wish to deposit from the available options.

BitMEX will generate a unique deposit address for your chosen cryptocurrency. Copy this address carefully.

Send the desired amount from your external wallet to the provided BitMEX address. Double-check the address before confirming the transaction.

Deposit times vary depending on the cryptocurrency network. Bitcoin deposits typically confirm within 1-3 blockchain confirmations.

When choosing a deposit method, consider:

• Transaction fees
• Processing times
• Your existing crypto holdings

If you already hold Bitcoin, depositing BTC directly is often the most straightforward option. For those with other cryptocurrencies, converting to BTC first may be necessary.

Remember to factor in network congestion and fees when planning your deposits. During high-traffic periods, transactions may take longer and incur higher costs.

 

BitMEX Security Features

BitMEX prioritizes the safety of user funds through robust security measures. The platform employs multi-signature wallets to protect cryptocurrency assets, requiring multiple transaction approvals.

Offline storage, known as cold storage, keeps most user funds away from potential online threats. This significantly reduces the risk of hacking attempts.

BitMEX leverages Amazon Web Services (AWS) for its infrastructure, benefiting from industry-leading security protocols and data protection measures.

The exchange regularly undergoes security audits to identify and address potential vulnerabilities. These audits help maintain a high protection standard for users’ assets and personal information.

User feedback suggests that BitMEX’s security measures are generally effective. Many traders appreciate the platform’s commitment to safeguarding their funds and data.

You can enable two-factor authentication (2FA) to enhance your account security. This adds an extra layer of protection by requiring a second verification step during login.

BitMEX also implements IP address allowlisting, allowing you to restrict account access to specific, trusted devices. This feature helps prevent unauthorized logins from unfamiliar locations.

The platform offers email notifications for essential account activities, informing you of suspicious actions or settings changes.

Always use strong, unique passwords, and be cautious of phishing attempts to protect your BitMEX account further.

 

BitMEX Customer Support

BitMEX offers multiple support channels to assist you with any issues or questions. You can reach out via email, live chat, or social media.

The exchange’s customer service has received positive feedback from users. Many report quick response times and helpful solutions to technical problems.

If you encounter an issue, you can expect the following process:

1. Contact support through your preferred channel
2. Describe your problem in detail
3. Receive an initial response, typically within 24 hours
4. Work with a support agent to resolve the issue

BitMEX’s live chat feature allows for real-time communication with support staff. This can be particularly useful for urgent matters or complex trading questions.

Users have praised the support team’s knowledge and patience. They often go above and beyond to ensure your problem is fully resolved.

Some customers have noted:

• Fast email response times
• Thorough explanations of trading procedures
• Effective troubleshooting for technical difficulties

While experiences may vary, BitMEX seems committed to providing quality customer support. Their team aims to address your concerns promptly and efficiently.

Remember to check the BitMEX help center before contacting support. You may find answers to common questions there, saving you time.

 

Is BitMEX a Legal & Safe Platform?

BitMEX operates in a complex regulatory landscape. The platform has faced legal challenges recently, including allegations of operating without proper licenses in certain jurisdictions.

In response to regulatory scrutiny, BitMEX has implemented enhanced compliance measures. These include Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to verify user identities and monitor transactions.

The exchange’s security measures are generally considered robust. BitMEX uses multi-signature wallets and cold storage for user funds, reducing the risk of hacks.

User trust scores for BitMEX are mixed. Some traders appreciate its advanced features and liquidity, while others have concerns about its regulatory status.

BitMEX’s safety record includes a few notable incidents. In 2020, the platform experienced a data leak that exposed user email addresses.

When choosing to trade on BitMEX, consider the following:

• Your jurisdiction’s regulations on cryptocurrency trading
• Your risk tolerance for using platforms with evolving legal statuses
• The importance of advanced trading features vs. regulatory certainty

Always research and consult financial advisors before trading on any cryptocurrency platform.

 

Conclusion