What makes trading platforms different and which one is better? On the following pages, you’ll learn what financial tools they offer, the amount of trading fees, or differences in the user interface.
Here we go!
BitMEX is a veteran with controversial history
BitMEX is currently the most popular leverage trading platform for cryptocurrencies. Since 2015, it has been the source of data for most professional traders, as it generates most of the bitcoin trading volume.
During 2017 and 2018, several suspicions appeared accusing BitMEX manipulating the market. It has often happened that BitMEX has suspended the platform without warning, resulting in the liquidation of a large amount of the traders’ positions.
The Deribit platform was founded in 2016 and is publicly profiled as a response to the non-transparent BitMEX. It is a trusted platform for professionals that offers greater security, fair approach and more financial instruments.
Let’s compare both platforms by the following categories:
- Registration method and entry bonuses
- Trading pairs
- User interface
- Security and finance management
- Leverage adjustment options
- Position liquidation and insurance funds
- Deposits and withdrawals
- BitMEX controversy
1) Registration method and entry bonuses
Neither BitMEX nor Deribit require identity verification. E-mail, password and country of residence will be enough to register.
Registration is straightforward for both platforms. Signing up for BitMEX using our link results in a 10% discount on fees for six months. If you do trade actively, you can save up to several thousand dollars.
Deribit has exactly the same offer…sign up here
2) Trading pairs
Two basic financial instruments are traded on BitMEX: perpetuals and futures. There are 13 pairs in total:
- Perpetuals: Bitcoin, Ethereum
- Futures: 4x Bitcoin, Ethereum, Cardano, Bitcoin Cash, EOS, Litecoin, Tron, Ripple
In addition to perpetuals and futures, Deribit also offers Bitcoin option trading, making it different from all competitors.
• Perpetuals: Bitcoin, Ethereum
• Futures: 2x Bitcoin, Ethereum
• Options: weekly, monthly, quarterly, half-yearly
3) User interface
BitMEX has a precisely designed interface and it is easy to navigate even for a novice trader. After seeing the instructional video, users usually understand all the basic features and will figure out the rest during daily use.
You can easily switch between individual pairs and their derivatives and special attention deserves the widgets on the main screen. They can be manipulated and the screen can be adapted to your preferences.
The table for entering and changing positions is intuitive and stays on the same place at all times.
Deribit loses a point here, clearly. Especially because of the large number of options and the desire to place all (even the less important) information on one screen. Learning to navigate the platform takes much longer.
One of the fundamental errors (on which Deribit is working on) is the absence of a simple button that would enable the trader to close an open position immediately. Situations where it is necessary to leave the market instantly occur really often and the inability to react immediately prepares traders for profits.
Unlike BitMEX, it is also not possible to edit the “stops” and target price directly on the graph. Filling the numbers to the order window slows down the reaction.
Deribit also does not allow you to rearrange individual elements, the trader simply has to get used to it.
Deribit used to have 30% lower fees than BitMEX, but today it is no longer true. Both platforms work with the “maker-taker” model. Fees are calculated based on whether you are bringing liquidity to the market (placing an order that will be filled out later) or taking the liquidity from the market.
Maker rebate: 0.025% (you get that much as long as you create liquidity)
Taker fee: 0.075% (you pay that much if you use the market liquidity to buy/sell)
BitMEX still easily maintains the leading position in traded volume. In 24 hours, it trades an average of 500,000 – 1,000,000 Bitcoins, while Deribit ranges from 15,000 to 20,000 Bitcoins, creating only about 10% of BitMEX’s volume.
6) Security and finance management
BitMEX is often criticized for having a base in Seychelles where it is not obliged to pay taxes. However, its technology stands out, the platform is written in kbd +, which is used by large banks and high-frequency trading platforms.
They use Amazon Web Services Cloud Security to protect data and to encrypt all platform-based emails with PGP. Users have the option to enable 2-step verification.
All Bitcoins held on BitMEX are in offline wallets and withdrawals are made by employees manually.
Deribit takes the security a little bit further and allocates 95% of the coins on hardware multi-signature wallets stored in bank vaults.
Deribit operates from Amsterdam, so it is a subject to European law. However, it means a little. It operates as an unregulated option broker. It’s not because they want to avoid regulation, it’s just the fact that european experts have not yet come up with a law defining cryptocurrency option platforms.
Until today, neither platform has been successfully attacked. All attacks were successfully repelled and no coins were stolen.
7) Leverage adjustment options
BitMEX allows you to select a leverage between 0-100x for Bitcoin perpetual contracts, 0-50x for Ethereum perpetual contracts, 0-33.3x for Litecoin perpetual contracts and 0-20x for all other perpetual contracts.
Deribit also supports up to 100x leverage, but it does not allow you to manage the risk by specifying the maximum amount of equity you want to risk as a guarantee for the position. Therefore, you must always set a stop loss order to prevent liquidation of the entire account.
BitMEX appreciates one $1, Deribit $10 contract. This also determines the smallest positions that can be opened. It is $1 for BitMEX and $10 for Deribit.
8) Position liquidation and insurance funds
The problem with BitMEX is the constant overloading of the system when it is most needed by traders. Due to the frequent liquidation of positions (due to unavailability of the platform), traders lose money and BitMEX is gaining profits.
If they liquidate the position with at least some profit, they will deposit the profits in the insurance fund. The fund is later used to finance positions that are ended in loss even for BitMEX.
Whether it is the overloading of the system or amounts of inexperienced traders, BitMEX’s insurance fund is growing at a rocket pace. In June 2018, it contained 6000 Bitcoins, in February 2019 it already had 21,000 Bitcoins in it.
Deribit is more transparent in its approach to liquidated positions. The automatic system evaluates each second if you have enough funds to maintain an opened position.
If not, the system automatically closes up to 10% of the position (at least 500 contracts). At the same time, they charge 0.375% as a liquidation fee, of which 0.3% goes to the insurance fund.
Deribit insurance fund is almost non-existent compared to BitMEX, it contains only 55 Bitcoins.
9) Deposits and withdrawals
BitMEX realizes withdrawals around 1PM every day. In the meantime, you have the option to apply for a withdrawal or cancel the request. Why only once a day? Because all coins are stored in offline wallets.
10) BitMEX controversy
BitMEX is known for its suspicious behavior when the crucial market moves happens.
The system overloads literally every time when the Bitcoin price changes significantly. At this point, the trader must make quick decisions, open and close positions and keep watching the graphs. However, this was often not possible because BitMEX reported an overload and the platform turned off for some time.
As a result, it often happened that users lost most of their equity during a single steep price swing when their orders were not executed.
An unproven, but even more controversial method of market manipulation is “Insider trading”, which uses the orders of all platform users.
BitMEX employees with access to order books can conveniently trade to their advantage because they all have perfect market information.
You will find countless user quotes on the internet describing situations when the price fired against their position and liquidated it with precision to one dollar.
Although Deribit is growing in popularity, the user base is still too small to satisfy the big cryptocurrency players. Until Deribit gets a daily volume at least a few hundred thousand BTCs, BitMEX will be the dominant player.
Against Deribit, there is also his complex environment that is too difficult for many traders. If Deribit manages to simplify the user experience and gain more volume, it will have a great chance to become the market leader.