Having launched in 2014, BitMEX loved a few years as the one fish swimming within the cryptocurrency derivatives pond. Nonetheless, in latest instances, it has discovered itself surrounded by an growing variety of rivals, each massive and small.
OKEx, Huobi, and Binance have all expanded from the spot markets into the crypto derivatives house. Different platforms corresponding to Deribit, Bybit, and FTX have entered the sector with their very own choices focusing on BitMEX’s market share. Based mostly on latest buying and selling volumes proven on Skew, a few of these newcomers are beginning to catch as much as their predecessor, which is already dropping out on quantity to its larger rivals.
Now, there’s a brand new participant within the sport – Foreign money.com. The corporate has launched its regulated buying and selling platform providing customers the chance to commerce tokenized securities, together with commodities, indices, and even shares. So how does the newcomer measure as much as BitMEX?
Foreign money.com has entered the market with the distinctive promoting level of providing a variety of tokenized securities. Tokenized securities seek advice from real-life securities, like shares, indices, commodities, or bonds, which might be represented as digital tokens. The proprietor of the digital token holds all the identical rights because the proprietor of the underlying asset, corresponding to to shareholder voting rights, and many others.
Foreign money.com companions with a sister agency referred to as Capital.com for brokerage companies. Every time a person buys or sells a tokenized safety, Capital.com conducts a transaction on the open market to purchase or promote the underlying bodily asset. Foreign money.com then credit or debits the person’s digital pockets with the tokenized model.
Customers can purchase tokenized indices such because the S&P 500 (^GSPC) or FTSE 100 (^FTSE) or particular person firm shares corresponding to these in Tesla (TSLA), Netflix (NFLX), Apple (AAPL), or Google (GOOGL). The vary of tokenized commodities contains valuable metals, oil and fuel, and crops corresponding to espresso and cocoa. Numerous foreign exchange pairs and cryptocurrency/fiat pairs are additionally out there for buying and selling.
In distinction, BitMEX is a pure cryptocurrency derivatives exchange. It sells a wide range of futures and perpetual swap contracts. BTC and ETH-backed contracts can be found paired with USD. Contracts backed with Cardano, EOS, Litecoin, bitcoin cash, Tron, and XRP can be found paired with BTC. Futures contracts are settled with one fastened expiration date.
Each platforms supply leveraged buying and selling as much as a most of 100x. Nonetheless, the leverage out there is determined by the product itself.
Buying and selling Charges
Buying and selling charges are comparable on each Foreign money.com and BitMEX. Each platforms cost a 0.075% taker charge and supply a 0.025% rebate on maker orders as a method of incentivizing merchants to contribute liquidity to the order guide.
BitMEX solely accepts funding in Bitcoin and settles all account balances in the identical. There aren’t any charges for deposits or withdrawals.
Foreign money.com permits customers to fund their accounts utilizing a wide range of fiat and cryptocurrencies. Fiat deposits may be made in USD, EUR, GBP, BYN, or RUB by way of bank card, Apple Pay, or wire switch. It additionally helps cryptocurrency deposits in BTC, ETH, LTC, and others. Funding charges are usually decrease for cryptocurrencies than fiat.
Regulation and Popularity
BitMEX is an unregulated exchange working out of Seychelles. As such, it has encountered extreme reputational points. These embody allegations that it runs a buying and selling desk that earnings from buying and selling towards customers, and that the exchange earnings from liquidated positions. For its half, BitMEX has denied the allegations.
However, the corporate continues to battle towards regulatory and authorized woes on a number of fronts. Final yr, the US CTFC initiated an investigation towards BitMEX for allegations that it was permitting US residents to commerce on its platform, which it additionally denies. Extra not too long ago, the corporate has been hit with a slew of lawsuits alleging numerous unlawful actions.
On the opposite finish of the spectrum, Foreign money.com trumpets its regulatory standing as a differentiator from its rivals. The corporate selected to arrange its headquarters in Belarus, primarily as a result of the federal government there has arrange a complete legislative framework round blockchain and cryptocurrencies. Foreign money.com has undergone the mandatory checks and filings to change into absolutely regulated by the federal government of Belarus.
Associate firm Capital.com is regulated by the UK Monetary Conduct Authority and the Cyprus Securities and Change Fee.
Foreign money.com additionally undergoes common audits by the Large four accounting companies. As a regulated exchange, customers of Foreign money.com should endure a full KYC examine to adjust to anti-money laundering laws.
Some components of the crypto group are very anti-KYC, citing privateness considerations. Nonetheless, there’s a transparent trade-off available between the safety and popularity of regulated versus unregulated platforms.
BitMEX is without doubt one of the few cryptocurrency exchanges that has by no means been hacked. The corporate states that it runs a multi-signature scheme for all deposits and withdrawals to its platform. Because of its offline storage techniques, hackers wouldn’t be capable of discover sufficient keys to allow any theft of funds.
Foreign money.com makes use of servers protected in an expert information heart, overseen by video surveillance and armed guards. The corporate additionally makes use of chilly storage wallets for many of its fund storage. It makes use of encrypted sizzling wallets just for the minimal funds crucial to keep up exchange liquidity.
Moreover, Foreign money.com retains all funds in reserve, which means a “run” on the exchange may at all times fulfill all withdrawal requests.
Usually, each platforms rating very extremely for safety.
Foreign money.com states that it will probably deal with as much as 50 million trades per second with no downtime.
However, BitMEX has a poor popularity for platform stability, with frequent server outages. Through the “Black Thursday” market crash in March 2020, there was speculation that BitMEX had taken down its platform intentionally, as a type of circuit breaker to cease buying and selling amid the market massacre.
Arthur Hayes is the co-founder and CEO of BitMEX and customarily serves because the face of the model. Earlier than founding BitMEX, Hayes was an skilled fairness derivatives dealer, having labored for Deutsche Bank and Citibank. Hayes is flanked by Ben Delo, an Oxford graduate in Arithmetic and Pc Science, and Samuel Reed, an skilled laptop scientist.
Foreign money.com is based by Viktor Prokopenya and Mentioned Gutsierev. Prokopenya is an IT entrepreneur and investor who based the funding agency VP Capital. Gutsierev is an Oxford graduate and founding father of Larnabel Ventures. Each co-founders have used their respective funding companies to offer backing to Foreign money.com.
Given the stark variations between these two platforms by way of merchandise and method to regulation, they’re a way from being direct rivals. Nonetheless, the sharp rise of FTX Change with its novel choices, corresponding to leveraged tokens, does point out that these within the crypto buying and selling house have an urge for food for progressive new merchandise.
BitMEX has been steadily dropping market share over latest years, even regardless of the burgeoning marketplace for cryptocurrency derivatives. Due to this fact, there’s each likelihood that Foreign money.com may lure away merchants with its broad product vary and keenness to appease regulators.