BitMEX is perhaps the most well-known margin exchange in the world, due to its popularity and reach it is often the first margin exchange where first-time margin traders try out their newly found hobby for the first time.
The exchange was co-founded by their well-known CEO, Arthur Hayes alongside Ben Dalo and Samuel Reed. All three are highly educated with a well-documented and robust background in their relevant fields.
For example, Mr. Hayes has an education from the exclusive Wharton Business School, after which he began to work on Deutsche Bank and Citibank’s ETF funds before heading towards cryptocurrency.
This level of relevant education and financial background is strangely somewhat rare with crypto exchanges, and something I do miss.
Part of the reason why there is a strong love and hate relationship with BitMEX and the crypto community is as mentioned due to many new margin traders throughout the years have entered the doors of BitMEX only to leave empty-handed. It can be a rough learning curve as a beginner to understand the mechanism of liquidations and leverage.
However that is hard to blame on an exchange, BitMEX was one of the first to offer services that were rare to be found in the western crypto markets early on, it was at a time when few understood margin trading, only alt-coin buying.
Equally notorious for being a rough learning place for newbies, it is also known for being the place where crypto traders have earned stupendous amounts of money with large leverage trades.
It is hardly coincidental that these enormous wins tend to be showcased on BitMEX more frequently than other exchanges. After seven years of being one of the most popular exchanges, you create a particular reputation and trust that is hard to forge quickly, which causes a real competitive advantage. This is along with the deep order books is one of the reasons substantial traders tend to trust BitMEX more than others.
Creating an Account
When creating an account at BitMEX all you need to do is enter your name, residence, and naturally your email. Fortunately, there is no KYC (Know Your Customer) verification requirements at BitMEX, meaning that you will never be requested to provide identification, proof of residence, or any such things that make the registration process a nuisance.
More importantly, it allows users to remain reasonably private and secure in the sense that there is little private information on BitMex servers that can get exposed if something were to leak our databases were to get breached.
This pertains to 99,9% of retail traders. However, those of you that trade with sizes well into the millions and businesses or corporations will be granted some benefits that come with the downside of having to provide proper identification.
Register by clicking our button to receive 10% off fees for 6 months. If you are a frequent trader recreating an account every 6 months to continue having 10% off is not a terrible idea.
BitMEX does not charge any fees on deposits or withdrawals.
Click your wallet balance status in the upper right corner to access your wallet , here you will see two clearly labeled options to deposit or withdraw.
Once you click deposit you will be taken to your bitcoin address.
Please make sure to send more or equal to 0.0001 bitcoin as this is the minimum deposit. It is also important to note that you can’t send anything other than bitcoin to your wallet address, all trading products on BitMEX use Bitcoin as collateral.
This is the only method of deposit on BitMEX.
Much like ByBit, BitMEX does not offer a wide range of trading products, instead it has a more focused choice of trading products, with the majority having excellent liquidity.
BitMEX is ranked as the number one crypto derivatives exchange in the world when it comes to open interest, which shows how many contracts have not yet been filled in the order book.
Combined with good volume numbers, BitMEX is considered the most liquid margin exchange for crypto traders. This makes it one of few viable exchanges amongst those who like to trade with a million contracts and more.
You would assume due to BitMEX’s liquidity that it would be the best exchange to trade bitcoin for all traders, but this would not be completely accurate. As the open interest shows, it has the best order book depth in total, but it is only the closest orders to the current price that is interesting for the majority of retail traders. In other words, we need to look at the order book density that is relevant for our trades.
A retail trader is someone who trades their own money, but not for a living.
After running orders simultaneously through API at all major derivative exchanges, I have concluded that for the majority of time retail traders with moderate size will likely have a slightly slower slippage on average when trading on ByBit.
From the order book above, we can see that a 3 million contract sell would only move the price 0.5 dollars. At the end of the day, when it comes to big orders, BitMEX remains king and is its order books can eat orders over millions of contracts without difficulty for the majority of the time, very few other exchanges can say this.
If you desire to trade with millions of contracts, there is likely no more suitable exchange than BitMEX.
By clicking the calculator icon next to “place order”, we will open the BitMEX calculator. It can help traders calculate three fundamental things we should have control over:
- Profit and Loss
Calculate your profit and losses in percentage and also your return on equity in percentage. If no leverage is used the profit and loss will always equal the return on equity.
- Target Price
Find out your target price dependent on your return on equity target and leverage.
- Liquidation Price
Finally, the most critical calculation for many is calculating the liquidation price based on leverage, entry price, direction, and account risk between isolated or cross-margin.
Isolated means only the margin collateral is at risk to be liquidated. In other words, only your isolated position. When using cross, you will use your whole account as collateral, this will result in liquidation prices further away from your entry but at the same time it is much riskier, as it is possible to lose your whole account.
There are two types of trading products on BitMEX, perpetual and futures contracts.
This contract holds many similarities to a futures contract, but unlike futures contracts a perpetual contract has no expiration or settlement. This means you can hold a perpetual as long as you want, hence the name perpetual. You pay or receive funding, depending on the funding rate for the duration of your position being open.
Perpetual contracts are the most popular on BitMEX and in general when looking at other derivative exchanges.
When holding a futures contract you will not have to pay funding, but you will be subjected to an expiry and settlement date, which means that when you reach that date your position will be settled and closed.
Futures contract will often trade at a premium or discount, depending on what the market believes the price will be in the settlement period. If the market is bullish, you will often find that futures prices are being traded at a significant premium over spot bitcoin prices and the opposite is true when the market is bearish.
Like most derivative exchanges, BitMEX also offers more than enough leverage on its different trading products. They currently offer up to 100X leverage. It is easily adjusted can be done so mid-trade, without any issues.
As always when mentioning leverage, I will recommend using it with care and preferably keeping a fairly low leverage for your own sake.
I reached out to BitMEX to get information on how many transactions per second per contract (TPS) the BitMEX matching engine can handle. Unfortunately, this is information they are not able to disclose.
BitMEX has received a lot of criticism for its trading engine, particularly the overload mechanism which occurs from time to time. The reason for this majority of time is due to what is known as load-shedding.
Load-shedding is when the rate of order requests received is higher than the rate that it is possible to process them, this results in the requests that get sent after the queue is full will get rejected.
A lot of these problems stem from the fact that BitMEX has had immense growth throughout the years, in fact in 2017 alone the exchange experienced staggering volume growth of 12 800%. In early 2016, it was handling around 1 million orders per month, and late 2019 it was processing approximately 200 million orders per month. It should come to no surprise then that BitMEX holds the record of amongst major derivative exchanges in daily traded volume.
BitMEX needs to increase its matching engine scaling efforts to further lower the overload issues, despite it becoming rarer, it still happens more frequently than desired. With alternative exchanges growing, I’m not confident they will be able to afford to have such issues hovering over them in the future as the scene becomes more competitive by the day.
It is important to note that it is difficult to conclude that their trading engine is worse than any other exchange, simply because the other exchanges have not been put under as much stress as we see on BitMEX.
Unlike many rivals, BitMEX has been around since 2014, thus it has had time to build trust and a good reputation. In the time it has existed it has never been hacked or lost customer funds in any way.
There is a reason for this naturally, BitMEX has implemented serious security measures on every level of the platform. From wallet security, system security, trading engine security to even communication security.
Their wallet security is a multi-signature wallet and deposit procedure, all of the multi-signature wallets are stored offline and no hot wallets are being used. This means that if their web servers, engine and database were to be compromised it would still not be possible to steal customer funds.
The reason withdrawal is a little slow at BitMEX is that as mentioned, it is multi-signature which means when withdrawals are made, 2 of 3 parters must sign each withdrawal for it to be executed. This process is manual and thus it is only done once per day.
The Bitmex trading engine is under continuous self-audit. There is a small audit happening every transaction. If a single satoshi goes missing or is transferred improperly, the trading engine shuts down immediately. This does not allow for an Mt. Gox type of hack to happen on BitMEX.
Overall, BitMEX is regarded as one of the more trustworthy crypto exchanges when it comes to platform security.
Despite this, they still managed to have a little e-mail blunder in 2019, when they sent out a mass e-mail with up to a 1000 recipients visible in each mail. This unfortunately exposed some names and e-mails which was a terrible mishap on their part. They wrote a response to this and the measures they were going to take to make sure this does not ever happen again, you can read their response here.
The interface feels and looks perhaps a little outdated, despite having a more modern theme than their older one. I believe the strength in this interface lies with the simplicity, it is not too much stimulus for the trader and all the vital information is immediately visible when you log in. It is easy to get started to trade straight away, which is something I can appreciate.
The account interface won’t show you any fancy equity curve, only a simple update of your account movements every time there is a deposit, withdrawal, profit, loss or funding payment.
There is a pretty cool feature in the chat called “trollbox,” where you can type /position and will show and record your position size, entry and current profit and losses. Everything in the chat is logged, so others can go back and verify your real positions. This is a great way to confirm that your positions are authentic if you ever needed to do so.
Other exchanges have leaderboards, but at the end of the day, this is the one people tend to look at, why? Simple, this is where you will find the biggest winners overall. The BitMEX leaderboard’s focus has probably decreased over time, but getting on this list would cement your status amongst the traders in the crypto community. It is fun, but I wouldn’t worry about trading on any exchange to get on a leaderboard. If you want to prove your talents to others there are plenty of trading competitions where this can be achieved. Nonetheless, one cant argue that there are a lot of impressive numbers on the BitMEX leaderboard.
BitMEX offers a wide range of different order types and functions, some of them are in fact not found on many other crypto exchanges such as their hidden order functionality. Overall they offer slightly more order functionality than the average exchange.
Amongst the order types we will find:
- Limit Orders
Limit orders provide liquidity for the market and are referred to as maker orders and they do not get filled until the market price reaches your specific order. Limit orders receive a maker fee rebate as a reward for providing liquidity for taker orders (market orders).
- Market Orders
Market orders take liquidity from the market as they immediately execute and get filled, these are called taker orders and pay a taker fee.
- Stop Orders
This includes limit stop orders, market stop orders as well as trailing stop functionality.
- Take Profit Orders
It executes when the price moves in a favorable direction to the trader in order to secure profits.
- Hidden Orders
Hidden orders are not visible to other traders in the order book.
- Iceberg Orders
Only part of the orders are visible, the rest of the orders remain hidden.
- Post-Only Orders
Post-Only mode ensures that your limit orders will never execute as market orders.
If any of these orders sound unfamiliar to you or want to learn more, please refer to our advanced order types and functions guide for a definition and explanation of possible functions and order types you might encounter on any major crypto exchanges.
The fees for perpetual swaps, which are the most popular trading product, are 0.075% for takers and -0.025% for makers. This means that the person taking the liquidity (market buying) is charged with a fee of 0.075%.
The person contributing to create the liquidity (limit orders) is rewarded with a maker rebate, which means the trader is granted a 0.025% payout from the exchange.
It’s great that they have a fee structure that rewards creating liquidity, other exchanges that have implemented a fee structure that does not pay makers, seem to have a more difficult time keeping their order books thick.
The fee structure for futures is slightly different than perpetual contracts on BitMEX, in the trading products where changes occur, the changes are only positive. Thus the futures have the best fees when it comes to makers and takers.
The fee is the same for bitcoin futures, I suspect the fee structure is meant to incentivize trading on the less popular products to create more liquid markets.
Once you click withdraw in your wallet, you will be taken to fill out all the standard information needed to execute a withdrawal.
The recommended network fee for each withdrawal is 0.001 and the absolute minimum you can withdraw is 0.0002.
It is important to note that withdrawal on BitMEX only happens once a day. It occurs specifically at 13:00 UTC, so if you want to withdraw in the same day make sure you submit your withdrawal before 13:00 UTC.
This can understandably be a nuisance for some. One of their biggest competitors which we have reviewed, is managing to do withdrawal three times per day and using multi-signature cold wallets as well. Hopefully, this is something BitMEX can improve over time but if you don’t withdraw all that often it is more than manageable.
Unlike other exchanges, BitMEX offers no live support for English speaking customers on telegram or directly from their website.
They have telegram channels available for Russian and Chinese customers, but I can’t verify how much support happens here.
Instead, they have opted to focus on a support ticket system. I certainly miss going quickly into telegram and receiving answers fast or using live chat if necessary. When other exchanges have 24/7 support, this support ticket system seems rather weak in comparison.
The benefit of having a support ticket system is that the person that replies to you is likely more qualified than the average support person in a telegram group or live chat.
The downside is obvious, the reply time is much longer and conversations through this support ticket system is very tedious and time-consuming.
BitMEX also provides a support desk with frequently asked questions and problems with answers in order to supplement the lackluster support system.
It seems that BitMEX has another strategy when it comes to retail customer support compared to other exchanges, they seem to be tying up as little resources in this department as possible. I’m sure it is a different story for institutional or business traders, but unfortunately, it does not provide the best possible support for the average retail trader.
The BitMEX testnet is a great way to get familiar with the exchange and trading. It allows you to play with strategies and exchange mechanics without risking anything besides your time.
You can register for the BitMEX testnet here.
The testnet is isolated from the real exchange which means even if you have BitMEX account you will still need to sign up for a testnet account.
Deposing BitMEX Testnet Bitcoin
The testnet deposits are naturally slightly different since we don’t need to use real bitcoin.
Once you are registered and inside the exchange, you will notice that everything will look similar to the real one. Click on your wallet and click deposit to copy your wallet address as you normally would.
Now you will have to visit websites known as bitcoin faucets, on these sites you will be able to receive free testnet bitcoin.
You can use this testnet faucet, once you are on the site, just paste in your testnet wallet address and click “get test coins” and receive your testnet bitcoin.
BitMEX Mobile App
Despite being one of the oldest derivative exchanges, they have only recently launched a BitMEX Mobile App.
As you would come to expect from any mobile app from the major exchanges you have the possibility to:
- Create limit, market and stop-orders
- Manage live positions
- Real-time Data
- Deposit and Withdraw
- Biometric security
Overall, the general feedback is that this app is more buggy and crashes more frequently than the apps launched by BitMEX’s closest competitors. However, one could argue that this is to be expected with an app that is brand new.
If you desire to download the app you can choose between the iOS and Android version below.
Alternatives to BitMEX
ByBit on average tends to have an equal or slightly more dense order book close to the current price, meaning that average retail traders will likely cause less slippage. The trading engine has also proven to be more robust with ByBit’s current trading volume.
FTX will have slightly higher slippage than BitMEX and ByBit but will in return offer a more stable trading platform than BitMEX and allow you to trade a far range of trading products while keeping your collateral in USD.
I use all three exchanges for three main reasons:
- I like to monitor the different execution times and average experienced slippage.
- I don’t want to have all my eggs in one basket, meaning I want to reduce my exchange risk.
- Each exchange has some strengths and weakness in direct comparison to each other.
BitMEX Review Summary
The exchange has proven to be in most ways, the king of liquidity, the numbers simply don’t lie. It’s likely in part due to the trust and notoriety the crypto exchange has managed to build up over the years, after all, seven years in the game is nothing to sneeze at.
There have been many crypto exchanges throughout the years that have vanished alongside with their client funds, this is why you would preferably like to see some history of exchange before you start trading on it. This naturally causes a competitive edge to the platforms that have proven to survive through thick and thin, but as time passes, the new exchanges earn more and more credibility.
When it comes to placing substantial orders such as 2 million contracts and more, there is no real competition out there for BitMEX, even though it might not always have the densest order books right at the price point. Still, very few can compete on the overall order book liquidity which BitMEX can provide to traders.
The interface itself is also quite easy to use and simple to navigate despite looking a little outdated compared to some other competitors.
The fees are fairly structured and it’s smart to have reduced them on less popular futures products to incentivize more trading volume.
Support is lacking compared to competitors, but the benefits will be a more technical sound person on the other end of your support ticket.
However, it is possible to fault the scaling capabilities of the trading engine as it far more often than competitors struggles to accept orders in the order queue due to the immense amount of orders that have to be accepted. This has been an issue for quite some time, I understand there have been updates but it still has not been scaled to the proportional magnitude to handle the most intense situations.
Now, it is essential to understand that this will not happen as frequently as I perhaps give you the impression of right now. I felt it was necessary and important to underline the BitMEX’s flaws as so many reviews I have read don’t even mention them in the hope they can more efficiently promote their referral or affiliate links.
At the early stages of crypto derivative exchanges, one was forced to accept that overloads would happen, but now with the creation of more and more exchanges, the average trader has more alternatives to choose from. I believe this is great for the cryptocurrency scene, as competition will force necessary changes that will benefit all customers.
The largest crypto derivatives exchange has benefits for large traders and downside when it comes to handling the number of trade orders, one would have to weight these things out and figure out what is the most critical factors.
In the end, BitMEX will likely retain its title as liquidity king for a while longer. I’m curious to see if their competitors will be able to scale similar amounts of volume with more success than BitMEX or maybe end up with the same issues.
All exchange reviews may be subject to change if the exchange becomes better or worse after the review has been published or the information becomes outdated.