Review of the top 9 cryptocurrency exchanges

In this article, we will consider the top 10 exchanges. The first one is Bitmex, which started to operate in 2014.

Web-site: https://www.bitmex.com

As of the moment of writing this article, this is the most popular crypto-exchange in the world.

BitMEX fully belongs to and operates under control of HDR Global Trading Limited, registered in the Republic of Seychelles.

The main specific feature of the exchange is that it was one of the first ones that launched derivative trading. It means that the exchange trades financial derivative instruments, such as forward futures (what futures are) and perpetual contracts, rather than cryptocurrency itself. This type of trading could be compared with trading futures on the CME or Moscow Exchange.

In fact, derivative trading is very similar to cryptocurrency trading with the exception that your account always stays in bitcoins on BitMEX. The prices on such derivatives move synchronously with the prices on basic cryptocurrencies.

The BitMEX list of traded derivatives is rather small compared to other exchanges. That is why, it might seem to you, at first sight, that a cryptocurrency trader has nothing to trade with on the exchange.

BitMEX offers two derivatives only, which serve as analogs of the cryptocurrency pairs – BTC/USD and ETH/USD and also six derivatives, which are similar to crypto-pairs:

• ADA/BTC;
• BCH/BTC;
• EOS/BTC;
• LTC/BTC;
• TRX/BTC;
• XRP/BTC.

However, the quantity here is inferior to quality, since these cryptocurrency based products are very attractive.The XBTUSD perpetual contract on BitMEX attracts so many traders not without reason. BitMEX itself calls this market the most liquid one in the world.

Apart from standard derivatives, BitMEX trades the bitcoin up and down contracts, which, in fact, are very similar to the option call and put contracts. Such contracts could be useful for those who don’t want to tolerate high risks but want to make high profit instead. A specific feature of each of such contracts is that the risk of the contract buyer is limited only to the premium paid for it, while the potential profit could be any, depending on how high or low the bitcoin exchange rate moved.

It might seem, at first sight, that such a scarce variety of trading instruments would scare away all traders, but, in fact, it is not so.

BitMEX offers its customers a possibility to trade with up to 100:1 leverage. Moreover, the exchange successfully supports:

• narrow spreads, which is important in cases of price slippage at stop losses. Also, narrow spreads (what spread is) are necessary for short-term trading;
• good liquidity in the BitMEX order book.

These features make the exchange attractive for experienced traders, whose goal is not a long-term investing but a speculative income on price fluctuations. That is why the exchange provides instruments with the best volatility and liquidity.

Depending on the type of the posted order, a commission on BitMEX could be either positive or … negative (!). For example, in the event a trader works on the exchange as a market maker (that is he posts limit / pending orders), the commission would be minus 0.025% when this order is activated, which means profit. If a trader prefers to enter ‘with the market’, the commission would be 0.075%, which falls on the trader’s shoulders. If you want to learn more about the difference between the market and limit orders, read the article about order matching.

It makes sense to pay attention to the fact that the exchange infrastructure uses high-rate databases and functionality written in kdb+. Just for your information – this database is used by the top 10 investment banks and many hedge funds. High rate of the exchange operation makes the introduction of algorithmic trading attractive.

It should be noted that developers pay due attention to the friendly interface of the exchange. To achieve it they minimized the working space, made it easy-to-understand and convenient and reference materials allow to clear out any issue with respect to trading and derivative financial instruments themselves. Moreover, this information is available in different languages.

The exchange assigns a significant role to the risk management system. Thus, BitMEX established an insurance fund for ensuring:

• stable operation;
• reasonable level of a guarantee of receiving a profit.

Similar measures are applied on major commodity and futures exchanges, such as CME, which have clearing houses. The volume of the BitMEX insurance fund is increased every month and it can be seen in the chart below, which presents information from the exchange’s official web-site.

The constant growth of the insurance fund shows that the BitMEX management attracts new funds, the sources of which are interested in supporting the exchange stability and developing trade in the cryptocurrency market.

We just want to add that the exchange developers are maximally focused on strengthening safety, due to which there haven’t been any cases of hacking and bitcoin stealing from the user wallets. The BitMEX security system guarantees that even in the event of a complete system hacking, a hacker will not have access to a sufficient number of keys required for stealing funds.

Web-site: https://www.bkex.com

BKEX was launched in June 2018. BTC King Technology Limited, which manages the exchange, is registered in the British Virgin Islands, however, judging by abundance of the Chinese language in the exchange interface, the main market of the exchange is China.

The exchange offers more than 100 cryptocurrency pairs for trading and new coins are constantly added to the listing. The exchange circulation takes top places every day on Coinmarketcap, however, you can find information on the Internet that the exchange artificially boosts the trading volume.

In fact, many exchanges did the same, even the famous ones. High competition among cryptocurrency exchanges forces new exchanges to use prohibited methods to get into the first lines of ratings. However, we think that to start relations with deception is a bad manner and disrespect to a customer.

BKEX envisages the same commission of 0.2% both for makers and takers, which testifies to a good appetite of the exchange owners, since you may find exchanges, which work for smaller commissions.

The English language interface has many inaccuracies.

You can deposit your account in any traded cryptocurrency, which allows using the exchange as a currency exchange office. Perhaps, this is the only advantage of the exchange among all its disadvantages.

Having analyzed other sources, we are convinced that this exchange could be used only for exchanging cryptocurrencies and is not good for systematic trading.