BitMEX – Is It Good?
BitMEX isn’t the easiest platform to review since there seems to be a lot of confusion around it. It’s not always listed properly and the information out there can be repetitive or even influenced by other factors. We like to review cryptocurrency exchanges in a simple and unbiased manner so we’ll figure out exactly what BitMEX is and what you can use it for.
So how good is BitMEX? Is BitMEX trustworthy? How do you use margin trading in the platform? And, most importantly, how does it stack up against other platforms?
What Does BitMEX provide?
Contrary to what its name seems to imply, BitMEX isn’t a Mexican exchange. BitMEX stands for Bitcoin Mercantile Exchange and it’s a margin-trading serviced focused to professional and more experienced Bitcoin traders. This basically means that you can buy and sell contracts for cryptocurrencies combined with margin trading, or leverage. So you aren’t buying the actual coins but merely contracts for them. And while you can buy them for several cryptocurrencies, BitMEX only accepts Bitcoin as a form of payment for those contracts.
Margin trading allows you to borrow additional cryptocurrency by leveraging the number of cryptocurrencies that you already own to buy more cryptocurrencies. It’s confusing so let me give you an example. Say you want to buy $10,000 worth of Bitcoin but you only have $5,000. With a margin account you can use your 5k and borrow the other 5k on margin. Now if tomorrow Bitcoin fluctuates and you sell it for $11,000, you pay off your $5,000 on margin and make $1,000. However if the reverse happens and you end up selling it at a $1,000 loss, that will also be your loss alone since you have to pay $5,000. That’s basically what BitMEX provides.
So how does BitMEX make money if you get to keep the profits? Well, the loan isn’t free of interest forever, it typically is for only a couple of days and after that, BitMEX will start charging interests. Not the best option if you’re looking to hodl. Margin trading basically just makes your Bitcoin investment even more volatile. You can make a lot of money if done right, but do it wrong and you can lose it all. That’s why BitMEX is only for experienced traders who have a strong grasp of the market and some money to risk.
BitMEX allows you to set up these purchases with margin in a few different ways. You can program those with Future Contracts which allows you to set up a purchase in the future, Perpetual Contracts which are like the Future Contracts but with no expiry date and both Upside Profit Contracts and Downside Profit Contracts, which allows you to participate in the potential raise or fall of a cryptocurrency.
BitMEX can be used in most countries except in the United States. You can use it from there with a VPN, however, using VPNs is directly against BitMEX policies.
BitMEX Rates and Buying Limits
Since this isn’t your traditional exchange, their fees will depend on the type of margin you get, the cryptocurrency contract and some other variables that are shown on the BitMEX website. BitMEX however does not charge fees on deposit or withdrawals.
- Customer Support: BitMEX provides live, 24/7 customer support and even have a Telegram, although that last one is only in Russian.
- Safe: With no reports of hackings and high trading volumes, you can trust their security systems and the platform in general. Their withdrawals are processed by hand with a written notice to protect you from fraudulent transactions.
- “Sandbox” environment: If you don’t feel ready to invest but want to learn more, you can use their simulators to learn how to invest without any risks.
- High leverage available: BitMEX offers up to 100% leverage on margin trading.
- Best for pros: If after reading this article you still have a hard time understanding how to use it, BitMEX is probably not for you.
- Not available in the US: Fooling the system to try and trade in the US may just make your already volatile investment into an even riskier one.
- No fiat option: BitMEX only uses Bitcoin to purchase contracts.
Go to BitMEX
Is BitMEX Good For Bitcoin?
If you’re an experienced trader, BitMEX is the best platform to use margin trading when investing in Bitcoin. It also offers a simulation of margin trading on its website and its low fees definitely makes it attractive to newcomers who want to learn how to invest. However, BitMEX just ends up making an already volatile investment like cryptocurrencies even more volatile. That can work wonders for you if you know what you’re doing or it can make you lose everything. However, it’s definitely an amazing tool for the experienced trader and the trader who wants to learn more, as long as it’s used with caution.