This BitMEX review takes a look at the reasons that traders continue to choose such a platform more than a decade after its launch. The exchange has developed somewhat of a reputation as a derivatives-based exchange rather than one that offers the more traditional cryptocurrency markets.
Since its introduction in 2014, the platform has played a notable role in the development of cryptocurrency derivatives trading – introducing perpetual futures contracts that would soon be widely adopted throughout the crypto exchange industry.
An understanding of the reasons that traders choose BitMEX requires a look at several aspects of the offering: the derivatives focus, the markets and liquidity, the trading infrastructure and tools, as well as what is shared by those who have experience with the platform. Each of these elements helps to account for the differences between BitMEX and other cryptocurrency venues.
BitMEX in the Crypto Derivatives Market
BitMEX was launched in 2014 by Arthur Hayes, Ben Delo and Samuel Reed. At the time, the cryptocurrency exchange world was small and focused largely upon spot trading of Bitcoin. BitMEX took a different approach – focusing almost entirely upon derivatives contracts of various types and prices within the cryptocurrency markets.
The exchange quickly developed a major feature in the form of perpetual futures – a type of derivative offering that allowed trading positions without a specific expiration date. The prices within the perpetual contract were kept aligned with spot markets through a regular funding process rather than an expiration date.
Such an innovation had a major influence upon the cryptocurrency derivatives markets – similar perpetual contracts were introduced across the other major crypto-based trading platforms. BitMEX had been one of the earliest to implement such a structure.
For these reasons, BitMEX came to be very associated with the derivatives segment of the cryptocurrency market. Those interested in leveraged strategies tended to look toward exchanges like BitMEX rather than spot-focused trading platforms.
How BitMEX Became Popular Among Traders
A number of factors contributed to BitMEX earning trading attention within an emerging derivatives market. The emphasis upon infrastructure designed for active trading rather than casual exchange was one aspect.
The availability of leveraged positions without needing to directly purchase the underlying cryptocurrencies created both long and short market strategies – very common features of derivatives-based trading environments.
The considerable liquidity present within Bitcoin-based derivatives markets means that any exchange focusing upon such contracts is likely to become a focal point for trading activity – especially as most derivatives traders pay particular attention to Bitcoin markets.
All of this contributed over time to establish BitMEX as a derivatives-based exchange within the cryptocurrency world. Such derivatives trading activity has developed within almost every area of the cryptocurrency industry – BitMEX was built as an exchange designed for traders engaging in more complex trading strategies.
Core Trading Features That Attract Traders
BitMEX’s functionality offers tools common within derivatives markets – a feature that contrasts with spot cryptocurrency exchanges.
Perpetual Futures Contracts
The primary offering on the exchange is perpetual futures contracts – which follow the price of a given cryptocurrency (mostly Bitcoin) but without requiring the ownership of that asset.
The absence of a set expiration date is one key element that distinguishes perpetual futures contracts from traditional futures offerings. The inclusion of periodic funding helps maintain the price proximity to spot markets.
This avoids the need for traders to handle contract expiry dates.
Margin and Leverage Tools
The platform allows margin trading and positions beyond initial capital deposits – made possible through leverage. Such leverage is a feature common throughout derivatives markets and essential for those who trade according to such strategies.
Trading Instruments Available on the BitMEX Platform
While much of BitMEX’s reputation is built upon its derivative markets and futures offerings, the exchange has gradually added other financial instruments to offer more diverse trading activity.
In addition to derivatives contracts, the exchange now features spot trading capabilities, equity perpetual contracts as well as options markets.
Advanced Order Types
The trading interface includes a range of order types to suit different positioning strategies.
The available order types include:
- limit orders
- market orders
- stop orders
- conditional orders
These features allow for automation of trading activity and positioning strategies.
Cross and Isolated Margin Modes
The exchange offers two margin management modes:
- Cross margin uses the total account balance to back positions open simultaneously.
- Isolated margin can be configured to deploy only a specific amount of collateral towards a particular position.
This provides flexibility in determining how collateral is distributed among various positions.
Trading Engine and Platform Infrastructure
Another factor that comes up in relation to BitMEX is the trading infrastructure. The exchange was specifically conceived to support high levels of trading activity – particularly within times of increased market volatility.
A trading engine coordinates incoming orders and market participants to ensure efficient execution of trades. The quality of such an engine impacts both trade execution and market stability during high levels of activity.
Given the nature of derivatives trading and price movements, infrastructure performance is key to any trading platform. BitMEX has positioned itself historically as such an exchange designed with these requirements.
Liquidity and Market Depth
The availability of markets without significant price movement is crucial to trading activity. Such depth plays an important role in derivatives markets.
BitMEX historically offers active markets in certain cryptocurrencies and derivatives – primarily those based upon Bitcoin. Market makers and traders contribute depth to the order book based upon price levels across the market.
Greater depth allows for lower bid-ask price differences and improves execution conditions for market participants.
BitMEX Fees Explained
Trading on BitMEX involves several types of fees according to the activity being carried out.
Maker and Taker Fees
BitMEX uses a maker-taker fee model:
• Maker orders add liquidity to the order book.
• Taker orders remove liquidity by executing against existing orders.
Example calculation:
| Parameter | Value |
| Trade size | $10,000 |
| Taker fee | 0.075% |
| Fee | $10,000 × 0.075% = $7.50 |
Funding Rate
Funding payments occur periodically for perpetual futures contracts. These payments are exchanged between traders holding long and short positions.
Example calculation:
| Parameter | Value |
| Position value | $10,000 |
| Funding rate | 0.01% |
| Payment | $10,000 × 0.01% = $1 |
Withdrawal Fees
Withdrawal fees are generally linked to the transaction costs of the underlying blockchain network used for transferring cryptocurrency.
BitMEX vs Other Derivatives Exchanges
| Platform | Founded | Derivatives | Leverage | Liquidity Focus | Complexity |
| BitMEX | 2014 | Yes | High | Multiple assets + equity perps | Advanced |
| Binance | 2017 | Yes | High | Multiple assets | Moderate |
| Bybit | 2018 | Yes | High | Derivatives markets | Advanced |
| OKX | 2017 | Yes | High | Multi-asset derivatives | Advanced |
| Deribit | 2016 | Yes | High | Options & BTC derivatives | Advanced |
Within the derivatives exchange segment, BitMEX competes with platforms like Bybit and Deribit – all focused upon leveraged cryptocurrency trading instruments.
What Traders Say About BitMEX
Discussions of BitMEX reveal several aspects of the platform. Experienced traders note the derivatives focus and advanced order tools.
The level of liquidity within the area of Bitcoin derivatives features heavily within the reviews. Given the focus of most derivatives activity upon BTC markets, such liquidity considerations are key factors in choosing an exchange.
The platform can be seen as complex for traders relatively new to derivatives activity. Such trading structures and margin-based perpetual contracts require some level of derivatives market experience.
The platform generally appeals to traders already well-versed in derivatives trading systems and strategies.
Key Advantages of BitMEX
A number of features help to explain BitMEX’s continued use within the cryptocurrency derivatives market.
- Derivatives specialization – the exchange focuses specifically upon derivatives rather than offering many spot-based products.
- Perpetual futures trading – BitMEX was amongst the earliest to introduce such contracts, which have since become widespread in the industry.
- Trading infrastructure – the exchange was set up to deal with high levels of trading activity.
- Liquidity in Bitcoin derivatives – active markets exist here historically for BTC-based derivatives.
- Advanced trading tools and strategies – the platform supports complex trading techniques and strategies.
Regulatory Context and Global Availability
The exchanges operate internationally through online means rather than local brokerages. As such, regulations can differ accordingly by where the users of BitMEX may be located.
In the United Kingdom, financial markets are covered by the Financial Conduct Authority (FCA). The FCA has been somewhat cautious in introducing cryptocurrency derivatives products – particularly to retail investors.
Public information does not indicate BitMEX operates under a direct license as a regulated investment firm within the UK. As with many international cryptos exchanges, the regulatory status reflects differences between various jurisdictions.
Who Typically Uses BitMEX
The trading environment sees different types of users.
The primary group consists of active cryptocurrency traders engaging in derivatives markets. Others are traders focusing upon derivatives strategies in relation to Bitcoin-based contracts.
The degree of specialization of trading activity and tools means platforms like BitMEX tend to be used by individuals already experienced in implementing such trading strategies and systems.
FAQ
How does BitMEX trading work?
The platform features leveraged derivative contracts including perpetual futures offerings.
How to withdraw from BitMEX?
Withdrawals are made via cryptocurrencies moving to external wallets.
