BitMEX Review 2019: Trading on BitMEX and is it safe?
BitMEX is a Hong Kong-based P2P platform registered in Seychelles. It is quite popular as a cryptocurrency trading platform. Here at BlockchainBiome, we look at BitMEX review, what BitMEX is, how to trade on BitMEX, supported cryptocurrencies and the pros and cons of it. This BitMEX review will give you exactly what you need to get started with BitMEX.
What is BitMEX?
BitMEX is a cryptocurrency exchange platform that has been gaining popularity since its inception in 2014. It is a Hong Kong-based cryptocurrency platform that has large volumes of trading taking place on it every day.
BitMEX is a P2P cryptocurrency platform and is significantly different from other trading platforms. BitMEX is fast growing to become one of the leading cryptocurrency platforms in the world. However, it is not as easy to use as some of the leading cryptocurrency exchanges in the world. A novice trader would require some time before becoming comfortable in using the platform. It has also had a few legitimacy issues with several users claiming it to be a scam.
P2P is short for Peer to Peer. As the name suggests, exchanges that are peer to peer do not rely on centralized authorities to carry out trades or exchanges. P2P exchanges are not facilitated by a central entity that monitors or regulates the transactions that take place on the site.
These exchanges, such as BitMEX, are completely decentralized. This stays true to the core principles of the blockchain network. Blockchain was built with the primary intention of removing middlemen and centralized authorities. P2P networks allow for the utilization of this principle.
A large number of cryptocurrency exchanges are not P2P. They merely act as intermediaries between the various customers and take commissions from the trades that get carried out on the platform.
P2P Exchanges vs Other Exchanges
Some cryptocurrency exchanges such as Bitstamp and Kraken provide the interface that users need to carry out trades. However, these exchanges are run by companies. Contrary to Bitcoin itself, these exchanges are not decentralized. They have staff that monitors and records all transactions that take place on the platform, and they collect fees for solving disputes and managing interactions between customers.
On the other hand, P2P exchanges are run by people. The transactions are maintained, operated and facilitated by software and not by any organization or institution.
How does BitMEX Work?
In turn, the buyer looks at the order book to make purchases. The order book is where buyers can view different quotes and choose the right one for themselves. Alternatively, if the buyer does not seem to find a suitable order on the order book, he can choose to create a Buy Order. In the buy order, the buyer can specify his own terms for making the purchase.
In a P2P exchange, the software is responsible for matchmaking. The buyers are matched with the sellers with the help of the software. There is no need for order book matching. Once the buyer and seller are matched, they are allowed to conduct the deal as they please, on mutually agreed terms.
BitMEX was co-founded by Arthur Hayes, Ben Delo, and Samuel Rees. Arthur Hayes is an economics graduate who lived in Hong Kong as an equity derivatives trader. He served as the market-maker for several corporations before starting BitMEX. He currently serves as the Chief Executive Officer (CEO) for BitMEX.
Ben Delo is a mathematics and computer science graduate. He has over ten years’ experience in building trading systems for large corporations. He currently serves as the Chief Strategy Officer (CSO) for BitMEX.
Samuel Rees is a computer science graduate who has extensive professional programming experience. Billed as a web applications expert, Samuel’s primary area of focus is in the development of web applications and interfaces. He currently serves as the Chief Technological Officer (CTO) at BitMEX.
The team is eclectic and has the right amount of experience from various industries. The team is also incredibly passionate about their project and has constantly promoted BitMEX on various platforms.
Registering on BitMEX Exchange
Cryptocurrencies supported by BitMEX
BitMEX allows deposits and withdrawals in Bitcoin. It has support for the following cryptocurrencies:
Bitcoin was the first major cryptocurrency to make waves in the trading market. It is the first cryptocurrency to gain prominence and is the pioneer that started it all.
Bitcoin Cash (BCH)
Bitcoin Cash was created to remove the block size limit on Bitcoin. It too is a decentralized peer to peer cryptocurrency.
Ethereum is a popular cryptocurrency as well. It was built on top of a platform that enabled the creation of decentralized applications and smart contracts.
Ethereum Classic (ETC)
Ethereum Classic is a cryptocurrency based on a smarter blockchain model. The blockchain model allows for smart contract execution. It was created with the aim of taking digital assets further.
Litecoin is a peer to peer cryptocurrency that aims to enable instant payments. It is not maintained by any central authority and is based on open source cryptographic protocols.
Monero is a private cryptocurrency that provides its users the benefit of not being traced by outside parties. With Monero, nobody on the outside can meddle with the blockchain network.
Ripple is a cryptocurrency mainly built for enterprise use. It aims to make payments easier and connects various entities involved in the transaction process securely.
Tezos is a private cryptocurrency where the stakeholders decide on the governance protocols. It works on the proof of stake principle.
ZCash is a cryptocurrency that aims to use cryptography extensively to provide security on its network.
Trading on BitMEX
Let’s move ahead in this Bitmex review and see how to trade on BitMEX.
Trading can be carried out using the US Dollar, Japanese Yen, and Chinese Yuan.
The trading platform on BitMEX is not easy to use for a beginner. It would take a considerable amount of usage before one becomes familiar with the platform.
To carry out a trade on the platform:
Trading Essentials for BitMEX
Long and Short
If you are going long, it means that you are expecting the value of the market to increase in the future. You buy or purchase a commodity or cryptocurrency in the hope of selling it at a higher cost sometime in the future.
If you are shorting, it means that you are expecting the value of the market to decrease in the near future. You sell a stock or cryptocurrency in the hope that its value reduces and then you buy it for a lesser value.
Margin trading is carried out by making a purchase using a currency that has been loaned out to you. In case of margin trading, you swap out with someone who is going long if you are going short. Similarly, you swap out with someone shorting if you are going long.
That is why you see the options on BitMEX as ‘Buy/Long’ or ‘Sell/Short’.
Your leverage is the number of funds that you borrow. The more leverage you have, the more the risk you take at getting liquidated.
Liquidation value is the price of all assets of an entity when it goes out of business. This is the price at which your account balance is wiped out.
Market order lets you buy or sell at the current market price. You get to choose the best price available on the market during going long or shorting. The price changes are in real time.
In a limit order, you specify the limit at which you choose to buy or sell the cryptocurrency. Once the market reaches the limit price, the order generally gets fulfilled. Limit orders also have lower transaction fees than market orders.
This is the value at which you start gaining profits as the price value increases.
Stop Loss Limit
This is the limit below which you are exited out of the trade to prevent losses.
Stop Loss Market
This is similar to the stop-loss limit, the only difference is that you would be immediately exited in this case when the market price is reached.
Trailing stops conveniently adjust to the current market price. A trailing stop is an order to buy or sell a currency when it starts moving in an unfavorable direction.
Contracts on BitMEX
Perpetual contracts were created specifically by the BitMEX team. This is the type of contract that you will be trading with, by default. These contracts do not have a specific date of expiration. As a result, they are a great choice for short term trading.
Look at the ‘BitMEX fees’ section below for more details on the fees at different leverages.
With future contracts, buyer and seller enter into an agreement to trade the currency at a fixed price at a specific date and time. These contracts ensure that there is no variability.
There are no fees on deposits and withdrawals on BitMEX.
The following are the fees based on leverages:
Customer support on BitMEX
The customer support on BitMEX is considered to be good. There have not been too many complaints about customer support. It also has decent support documentation. It also has a chat option for members of the BitMEX community to communicate with each other. BitMEX also has an email and ticket system for answering users’ questions and concerns.
Is BitMEX Safe?
BitMEX has come under criticism from several users for not being reliable. Some users claim that the platform constantly changes the market value of cryptocurrencies so that BitMEX makes large profits. However, it has been around for quite some time and also has several good reviews.
Wrapping up BitMEX Review
BitMEX has a technically sound team with great business experience. However, several critical reviews and opinions seem to suggest that it might be wise to stay away from the platform. It is not easy for an amateur trader to get started on this platform. However, for the advanced trader who knows what he is doing, this platform might be a good option.
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