An Alternative To BitMEX

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An Alternative To BitMEX

BitMEX is a popular cryptocurrency exchange which specialises in offering advanced trading tools targetted to experienced traders. Its full name is Bitcoin Mercantile Exchange, but BitMEX is the name that caught on, and which today counts millions of users worldwide.

BitMEX: A Closer Look

bitmex exchange
Screenshots are shown for illustration purposes only. Actual product may vary.

Unlike most cryptocurrency exchanges, BitMEX offers the very specific service of facilitating the trading of futures and perpetual contracts. As a result, when you use this exchange you are not actually trading the actual cryptocurrency asset, but on contracts whose value is derived from the underlying asset. Understanding how Bitcoin CFDs work requires extensive trading knowledge, which is why BitMEX is considered to be an exchange for well-versed users.

As with most exchanges which offer advanced trading instruments, BitMEX allows you to trade on leverage. Commonly referred to as margin trading, this feature allows you to inflate your investment capital to generate higher returns. The exchange permits margin trading of up to 100x your investment. This advanced trading practice comes with a potential downside, so it is important that you understand the risks involved.

Advanced traders who use BitMEX will find several investment options which are difficult to find at other top cryptocurrency exchanges. These options include:

  • Futures – a contract based on the buying or selling of a specific cryptocurrency at a pre-agreed price and moment
  • Perpetual – a contract which is very similar to Futures, but does not include a specific expiry period
  • Upside Profit – a contract which allows traders to gain from the potential upside of a specific cryptocurrency
  • Downside Profit  – a contract which allows traders to gain from a potential downside of a specific cryptocurrency

The BitMEX trading platform is highly lauded for being fast, easy to use and reliable. It offers users the opportunity to get in touch with a support staff member instantly via the live chat option and provides detailed trading information which is vital for successful trades. Furthermore, the exchange’s fees are amongst the most competitive in the industry.

All of these features make BitMEX one of the best cryptocurrency exchanges available, however, the platform has one significant shortcoming; it does not accept fiat currency or any other cryptocurrency except for Bitcoin. As a result, you must own Bitcoin to use the exchange. For most potential users, this means opening an account with a second exchange, making the necessary currency exchanges, and finally transferring Bitcoin into their BitMEX account.

For those who do not wish to go through these hurdles, an alternative to BitMEX exists.

BaseFEX

Screenshots are shown for illustration purposes only. Actual product may vary.

BaseFEX shares many of the same features as BitMEX. Both platforms specialise in offering cryptocurrency derivatives with leverages of up to 100x. Although BaseFEX is owned by a company registered in Seychelles, it looks like the platform operates from Hong Kong, just like BitMEX.

In order to keep user’s funds safe, BaseFEX stores all of its assets in cold wallets which require multi-signatures. Furthermore, the company invested heavily in implementing security systems which safeguard users and their confidential information. As a way to test these systems, BaseFEX runs a bug bounty program, where it encourages users to notify it of any potential security flaws in exchange of a reward.

BaseFEX Funding Options

The only way to deposit funds into your BaseFEX account is through cryptocurrency, specifically Bitcoin. In fact, similarly to BitMEX, BaseFEX does not support any other cryptocurrency, nor does it accept payments in fiat currency. As a result, the only way to fund your account is through a wallet transfer.

The exchange does not require any documentation when opening an account, so you can use BaseFEX anonymously. While this lack of KYC is welcomed by some in the crypto community, it is viewed as risky by various authorities, which is probably why the platform is not available to users in various countries, including the United States.

BaseFEX Trading Services

BaseFEX’s trading platform is both easy to use and similar to others in the industry, so you should be able to get used to it fairly quickly. Since the primary financial instrument being traded are derivatives, the platform provides you with detailed charting and analysis tools, with a generous amount of historical data. Furthermore, when placing an order with BaseFEX, you can set a variety of automatical limits, such as the minimum and maximum value in which to open or close a position.

BaseFEX Fees & Limits

BaseFEX is extremely transparent with its fee structure, which you can view at any time, even when you are not logged into your account. On this list, you can locate all perpetual contract pairs and relevant fees in the form of a percentage. As with BitMEX, the primary fees are split between Maker and Takers, Long Funding and Short Funding. With BaseFEX, the funding interval is an eight-hour segment for each perpetual contract.

For most of its products, BaseFEX sets a 0% Maker fee, while Taker fees often range between 0.2% and 0.05%. Long Funding is usually around 0.01%, while Short Funding is usually set around the -0.01% mark. As with most trading platforms in this category, fees are subject to the market’s lending rates.

Traders with large investment capabilities will be able to get a discount of 50% on the platform’s commission fees. In order to qualify, traders must have an account with an order value of over $35 million within seven days. Understandably, the majority of BaseFEX’s customers will not be able to avail of this offer.

Since BaseFEX does not deal with fiat currency, it does not charge any deposit or withdrawal fees. Payments are normally processed within a short time and are instantly transferred to your account. Similarly, there are no limits on deposits or withdrawals, unlike BitMEX which sets a minimum deposit value.

CEX

cex.io broker
Screenshots are shown for illustration purposes only. Actual product may vary.

CEX.io is one of the oldest and most successful cryptocurrency exchanges in the sector and is based in London. The exchange once included a major cloud mining pool, but this was eventually closed off. It is licenced to carry out money-based transactions, registered as a Money Service Business (MSB) with FinCEN. This licence makes CEX a preferred exchange amongst those looking to trade with a regulated institution, which, currently, BitMEX is not.

CEX Funding Options

One of the major differences between CEX and BitMEX is that the former accepts both fiat and cryptocurrencies. In fact, the exchange accepts USD, EUR, and GBP payments, as well as an assortment of cryptos, ranging from Bitcoin to Zcash. This means that you can open an account with CEX, exchange your fiat currency and instantly use your cryptocurrency, without needing a secondary exchange.

Payments into CEX can be made using credit or debit cards, bank transfers, Crypto Capital or wallet-to-wallet transfers. This variety of payment methods facilitate the process of acquiring cryptocurrency, both for novice traders, but also for advanced traders looking to invest in less popular digital currencies.

CEX Trading Services

As an alternative to BitMEX, CEX offers margin trading services through its dedicated platform, CEX.io Broker. This advanced platform offers users the possibility to trade CFDs with a variety of order types. In addition, you can access detailed charting and analysis tools, as well as advanced trading options. Margin trading is also possible on the platform, with varying limits based on the contract being traded.

Unlike BitMEX, CEX also offers a traditional centralised exchange platform for users to buy and sell cryptocurrency with ease. This platform is split into two services, namely Brokerage and Trading. CEX.io Brokerage is better-suited to the novice trader looking to trade cryptocurrency in an easy and straightforward manner, outsourcing all the technical processes to the exchange operator. CEX.io Trading is a more advanced exchange platform which is best suited to more experienced traders.

CEX Fees & Limits

Since CEX offers a wider range of trading options and services, its fees are understandably higher than those of BitMEX. It’s brokerage service charges the highest fees, but this is in line with industry practices. It’s trading platform charges significantly lower fees, and its overall lowest fees are charged on CEX.io Broker. Margin trading is charged at 0.2%, whereas its Maker and Taker fees range between 0.16% and 0.25%. These fees are considerably higher than BitMEX’s fees of -0.025% for Maker and 0.075% for Taker.

CEX also charges fees for certain deposits and withdrawals, while BitMEX does not, since it only accepts Bitcoin payments. 

Both CEX and BitMEX have no withdrawal limits and no maximum deposit limits for fully-registered accounts. Limits do exist for users who are not yet fully registered on CEX, in line with the exchange’s compliance and licencing requirements.

Conclusion

While BitMEX, BaseFEX and CEX are able to accommodate the needs of traders looking to invest in CFDs, CEX’s additional services and BaseFEX’s lower fees make them interesting alternatives which could offer better value, depending on your needs. Nevertheless, all three platforms maintain a high degree of reliability and service, especially in terms of user experience and convenience.

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