Bitcoin CFD Trading – How Do I Open A BitMEX Account?
For the uninitiated, taking your first steps on the BitMEX exchange can seem complicated. The interface is uninviting and, let’s face it, intimidating. But by getting to know this platform and with a little help registering, it quickly becomes much more accessible.
In this comprehensive guide to creating a BitMEX account, we’ll take you through the features of the site. Thanks to this overview, you will be able to discover a little more about this trading platform active in the crypto sphere since 2014. We will then see how to create your account, secure it, and prepare yourself for your trading activity.
Remember, if you are new to cryptocurrency, you can learn more about the world of crypto by checking out our guide.
The history of BitMEX
BitMEX is a platform founded in 2014 by Arthur Hayes, Ben Delo and Samuel Reed through their company HDR Global Trading Limited. These three former bankers wanted to create an exchange platform that was a little different from the others. Although BitMEX offers peer-to-peer exchanges like most of its competitors, it has the particularity of only accepting deposits in bitcoin (BTC, but referred to on BitMEX as XBT) and using it for your activities on the site, namely, trading.
Note that on BitMEX, you are not trading actual cryptocurrencies, but financial derivatives. BitMEX also offers leverage.
Today, BitMEX operates in many countries. Registered in the Seychelles, but with its main offices based in Hong Kong, the “Bitcoin Mercantile Exchange” (full name of BitMEX) represents one of the largest Bitcoin trading platforms currently in operation.
If you want to learn more about the platform, please check out our review.
More on BitMEX and CFDs
BitMEX is a CFD (contract for difference) trading platform. Thanks to this financial derivative product, you can trade on the financial markets (stocks, forex, indices, commodities) without owning the actual assets. A CFD allows you to trade the difference in the price of the asset between when the contract is entered into and when it is closed. Thus, the trader can trade on the upward or downward movements of the price, and their earnings depend on their initial estimates.
There are various cryptocurrency pairs that you can trade on BitMEX through this type of contract. The platform allows a significant amount of leverage – of up to 100x in the case of bitcoin. It also uses a fair pricing system (‘Fair Price Marking’, based on the price index) through which the prices of their perpetual and forward contracts are estimated.
Many traders choose BitMEX because of the leverage that its contracts allow. The leverage you can achieve is as follows:
- 100x for Bitcoin
- 50x for Ethereum
- 33.33x for Litecoin
- 20x for Bitcoin Cash, Cardano, EOS, Ripple and Tron
Security on BitMEX
As it isn’t regulated by any jurisdiction, questions can be raised about the level of security BitMEX users can expect. Fortunately – and this is arguably why BitMEX is considered a respectable exchange – the platform is committed to protecting traders in general, and their identity in particular. The platform’s two-factor authentication (2FA) prevents hackers from stealing users’ personal information.
Additionally, BitMEX offers an IP address pinning option to receive a notification when a user logs in from an unknown device. PGP (pretty good privacy) encryption provides additional peace of mind, especially for preventing spam.
Even after an annoying leak caused by an internal email that the email addresses of 1000 traders were copied to, the platform is considered safe. It prides itself on performing 100 audits per second and never having lost a single BTC to an intrusion.
BitMEX keeps user funds in multi-signature wallets (a type of cryptocurrency wallet) in cold storage (i.e. offline) for optimal protection. When a customer wishes to make a withdrawal, it is manually verified by two BitMEX employees who must approve and validate it. Finally, the BitMEX exchange never backs up private keys on cloud-based servers.
The registration process for a BitMEX account only takes a few seconds. In addition, you can be reassured, because the platform, like many websites today, allows you to replace a forgotten password with instructions sent to the email address provided during registration. This can be particularly useful if the password you have chosen is very complex and therefore difficult to remember.
The steps to create a BitMEX account are simple, but it should be noted that the platform is only available in five languages: English, Chinese, Japanese, Korean and Russian. The site is still very easy to navigate, even if English isn’t your mother tongue, however the technical trading terms may cause you future headaches.
Start by going to the BitMEX home page. To access the registration window, you have two options: you can go to the boxes at the top right of the screen and click on “Register”. Otherwise, the “Log In” area on the same page also contains the “Need an Account? Register” Link. Click “Register” under the green button to identify yourself. The button just below (“Forgot Password or Two-Factor Device?”) will help you if you forget your password or 2FA identification.
You are then redirected to a window called “Register”, which informs you that you will be able to start trading in just a few seconds. Indeed, upon receipt of the confirmation email, you can make a deposit and get started immediately.
The only information that is requested from you at this stage is:
- Your email address
- Your password
- Country or region of residence
- First name
- Last name
Validating your account
The process to validate your BitMEX account is very simple. Within minutes of registering, you should receive a confirmation email from the BitMEX team.
Good to know: Check your spam folder if you still haven’t seen an email after a few minutes.
Once your confirmation email is in front of you, simply click on the “Verify My Email” link which will allow you to finalise your registration and set up your account.
By returning to the BitMEX site, you will now be able to identify yourself.
To log into your BitMEX account, you can use the “Log In” button on the right of the home page screen, where you can enter your email address and your password. At this point, you will not need to use the “Two-Factor Token (if enabled)” box, as you will not have activated the two-factor identification yet.
Secure your account
BitMEX users do not have to submit any documents to use the exchange. They can start trading immediately after creating their account.
On the other hand, it is possible for BitMEX users to have a higher level of security to protect their information thanks to two-factor authentication. This is by no means mandatory on the platform; it is nevertheless strongly recommended to protect the account which, let’s remember, stores your money!
This additional layer of security strengthens your password. Logging into your BitMEX account will require an additional step: a unique and temporary code that will be generated on a mobile app. So, you will need a smartphone or tablet to use it. TOTP (time-based one-time password), for example, is a reliable application that is compatible with the platform.
With this solution, it is imperative that you have the mobile device to hand that the code will be sent to in order to connect. Even if a hacker has stolen your credentials, they will not be able to access your information without it.
Good to know: When two-factor authentication is activated, your mobile device becomes a key, requiring an internet connection to generate the said code. So keep this in mind if you find yourself in an area without signal.
To set up 2FA on BitMEX, follow these simple steps:
- Click on “Account” at the top of the screen once you are logged in
- Then click on “Security Center” on the left
- In the “Two-Factor Authentication (2FA)” section, which is in the first sector of the page, select your means of authentication between TOTP and YubiKey
- If you have chosen TOTP, then click on “Add TOTP …”, then download the app
- Then open the app and click on the “+” symbol, which will give you a code that you will have to type (the “two-factor token”). Note that you can also scan the QR code shown on BitMEX
- Click on “Confirm TOTP”
- If you have chosen the YubiKey hardware, plug it in, then wait for your device to light up
- Then press the illuminated button, then enter the “Yubikey Token”
- Click on “Confirm Yubikey”
Regardless of your 2FA method, it will be used for login, withdrawals and changes to your account security. Also, after setting up your two-factor authentication, the platform will not allow withdrawals for 24 hours.
The operation of 2FA is simple: each time you attempt to connect to your BitMEX account, the application or device will generate a new code to be entered in the box provided.
Deposit BTC on BitMEX
On BitMEX, you do not have the option of buying currencies with your credit card or bank transfer. The only way to trade on the platform is to hold bitcoin (BTC), which you can send to the exchange in order to use, as it’s the only currency the exchange accepts.
If you have other cryptocurrencies, you will therefore need to exchange them for Bitcoin to trade on BitMEX. And if you don’t already have some, you’ll need to go through another platform (such as Kraken or Coinbase) to acquire some.
Compare exchange platforms with our guide here.
Then you have to identify yourself, go to your dashboard and follow a simple procedure:
- Click on “Account ”
- Then click on “Deposit”
- Your “deposit address” should be displayed. You can send your bitcoins by copying it or scanning the QR code
- A few minutes later, you will receive an email indicating “Deposit Confirmed” or “Your deposit was successful”, which means that your funds are now available on the platform
Good to know: Remember that you can only deposit bitcoin to the given address, and that you must respect the minimum deposit, which is 0.0001 BTC (or 10,000 satoshis).
Trading on BitMEX
To start trading on BitMEX, the “Trade” button is the one that will take you to the dedicated space which, although seemingly off-putting by its slightly outdated design, remains relatively intuitive… If you are already used to trading in markets of the same type.
Trading instruments allow you to take positions and buy/sell contracts. While deposits can only be made in bitcoin, trading involves a number of other cryptocurrencies as well. Among them are ether (ETH), bitcoin cash (BCH), litecoin (LTC) and ripple (XRP).
Although the user interface is relatively unattractive, it has the merit of favoring a certain practicality in the visualisation of the data provided to traders. You will be able to rearrange the widgets, or even decide whether or not to display charts from Trading View. This is BitMEX’s edge over its competition, because this selection of graphics and tools are favoured by traders.
The Tab Bar
The platform interface has a white area at the top of the screen where the contracts offered by BitMEX are displayed as well as their price action over the last 24 hours. Hovering the mouse over “All” allows you to choose what you want to view. You can also access each contract with a single click.
The price index (or “.BXBT.”) is located further to the right and gives the index of the cryptocurrency you are on.
Further to the right, “Funding” (a counter followed by a percentage) corresponds to the time remaining before charges are levied on your open positions (a.k.a. “Perpetual Contracts”) and the percentage at which your ‘long’ positions are subject to. A “Futures Contract” will instead display “Settlement” as well as the expiration date of the contract in question.
Under the white area is the above-mentioned tab bar with the “Trade” button, which redirects you to the trading area. There you will also find an “Account” button which gives you access to your account history, deposits and withdrawals. The “Contract” button, in turn, provides information on the various contracts. “References” leads to the documentation at your disposal. Finally, “API” is the last button that allows you to configure access to your BitMEX account from another account.
The order window
This window allows you to create a buy or sell order on BitMEX. “Limit”, “Market” and “Stop Market” are the main options offered. Others are available via the blue arrow.
The space also has a calculator for calculating your profit/loss ratio. You will also find a “Quantity” zone, a “Cost” zone which gives the cost in BTC of the position and an “Order Value” zone indicating the “Cost” multiplied by the leverage.
The “Trade” button takes you to the order book (or “Orderbook”). This gives you access to pending orders, quantity and prices. Feel free to use the star wheel to make your own adjustments.
The other windows allow you to keep an eye on your orders (“Chart”) or to have a graphic visual of the orderbook (“Depth Chart”). You will be able to consult your last trades (“Recent Trades”) or even display a summary of your positions (“Positions”).
BitMEX: advantages and disadvantages
The main advantage of trading cryptocurrency future contracts is the ability to use leverage. Investors can operate with large sums of money and earn more profits than their initial capital would usually allow them. But that does not mean that this practice is risk-free.
The BitMEX platform is not really for beginners. It’s not a very easy site to use. Therefore, it is better to build up a sufficient level of expertise to make the most of leverage and CFDs on the platform. Investors must avoid excess margins and protect their capital more carefully here than on other platforms. If an inexperienced user decides to use leverage, there is a real risk of losing all of their capital in a short space of time.
BitMEX charges different fees depending on the product used. The scale is relatively simple, but it is essential to always take it into account. Fortunately, the platform offers beginners a practice version. On their testnet, you have a virtual account with which you can make your first trading attempts.
The fact that the BitMEX platform has never been hacked is a big plus, which places it ahead of the competition when it comes to security. On the other hand, it can sometimes struggle, or slow down, when the volumes of exchanges are very high, which may annoy a good deal of users.
BitMEX also has an insurance fund of almost 0.2% of all bitcoin in circulation (equivalent to £480 million as of October 2020). Using this fund, BitMEX can automatically liquidate open leveraged positions when traders’ deposits are not sufficient to create the necessary margin. This gives users the opportunity to use leverage with greater peace of mind and potentially achieve larger gains without risking losing more than what they invested.
BitMEX’s margin trading exchange also offers an announcement system and live chat to keep abreast of important events. However, be beware that some users use this space from time to time to troll and try to manipulate the price of Bitcoin… it is therefore sometimes better to ignore it!
In the event of any problems, the BitMEX trading platform offers its users a 24/7 support channel in the form of email support, through their ticketing system and via social media. Customer support teams usually respond within an hour of a request. The existing knowledge base is also an excellent resource as well as their FAQ section, which can be particularly useful.
The BitMEX trading platform is relatively complex, both technically and in terms of the trading activities that can be carried out there. This exchange is by no means intended for amateur investors who might get lost and potentially lose a lot.
For those who have already cut their teeth in the world of trading, on the other hand, it offers a wide range of tools and information from which experienced traders can profit from. Finally, be aware that BitMEX is very straightforward to experienced users of the Bitcoin market, which, as we recall, is the main cryptocurrency traded with on the platform. Ready to take your first step on BitMEX? It’s this way.
Président et Cofondateur de MinedHack et fervent défenseur de la Blockchain depuis 2017, je suis conscient que sans explications et vision de l’industrie son adoption n’aura jamais lieu. J’ose espérer en tant que Reporter et Rédacteur de CoinTribune aider à cette mission.