No need for CFDs: BitMEX introduces leveraged FX perpetual swaps

Rick Steves

Previously retail FX trading was mostly possible via CFDs (contract for difference). BitMEX’s FX perps allow both retail users and institutional traders to access FX markets through an exchange-traded contract.

BitMEX has launched FX perpetual swap contracts (FX perps) as part of a wider derivatives offering, which allows retail and institutional users to trade FX perps with up to 50x leverage.

The FX perps offering currently boasts 22 contracts on some of the most popular foreign currency pairs 24/7, even when the foreign exchange (FX) market is closed.

Margined and settled in either Bitcoin or Tether (ERC-20), FX perpetual contracts are ideal for traders who want the advantage of derivatives without the difficulty of expiry dates.

Alexander Höptner, Chief Executive Officer of BitMEX, said: “The launch of our FX perpetual swap marks another step in our journey to create a vibrant crypto ecosystem for our customers. At BitMEX we are focused on facilitating trading while continuing to develop innovative new products to complement our existing range of features, ultimately providing our clients with an even more seamless experience.”

BitMEX now has 57 contracts on 24 different underlying cryptocurrencies.

FX perps are margined and settled in Bitcoin or Tether

The innovative perpetual foreign exchange swap listing brings together the unique characteristics of crypto perpetual swaps and the world’s largest and most liquid market – FX. FX perpetual contracts on BitMEX are margined and settled in either Bitcoin or Tether (ERC-20).

Traded on an orderbook-driven market, P2P, and backed by an insurance fund, the FX perpetual swap contracts blends the advantageous
attributes of both the spot and future markets. The perpetual swap offers leveraged trading, working in a similar way to traditional futures contracts but without an expiry date.

The FX perps’ funding rate is paid every eight hours to help trading prices stay in line with the underlying index price. The FX perpetual swap allows users to long or short FX pairs – e.g. EURUSD and NZDUSD – in order to capitalise on price differences in foreign currency markets.

The perpetual swap is the most popular product on the BitMEX platform and its “XBTUSD” perpetual contract is one of the most liquid cryptocurrency derivative contracts in the world. BitMEX is now bringing to market a new innovative product that could become as popular.

FX perps join the list of BitMEX’s crypto-margined contracts and is available for both retail and institutional users.

FX perps solve arbitrage issues in crypto

Daniel Egloff, Head of Quants at BitMEX, explains: “BitMEX FX perps are a transparent exchange-traded contract which allows FX traders to go long and short as a taker or maker for which we offer a 1 basis point fee rebate, which is unique in the industry. For institutional users, FX perps provide an entirely new way to create synthetic crypto pairs to arbitrage – for example, Bitcoin quoted in non-USD currencies.”

There is a significant spread between XBTUSD versus other pairs like XBTEUR, which is not easily capitalised due to the need to bridge the crypto and spot FX markets.

“This has a rather high cost due to FX transactions and FX bank transfers and is operationally challenging. This kind of arbitrage is now greatly simplified with FX perps, all within the ecosystem of crypto currencies. Another use case is to hedge the inherent USD risk that comes with long crypto exposure, as most of the liquidity is quoted in USD or stable coins tracking USD”, he added.

Read this next

Digital Assets

Despite crypto winter, Cake DeFi paid out $58 million in Q2 rewards

According to its latest ‘Transparency Report,’ Cake DeFi continued its growth trajectory in the three months through June 2022, even as the entire crypto industry experienced macro challenges this quarter.

Retail FX

SimpleFX Review: Cryptos, Spreads, Pros & Cons

SimpleFX combines years of Forex and cryptocurrency experience with a focus on offering resources to retail traders. 

Retail FX

Ironbeam becomes CME clearing member and launches MT5

“The direct clearing aspect along with our low-latency proprietary trading tools and technology solutions make Ironbeam the ideal trading destination.”

Institutional FX

Top 0.07%: oneZero makes it to Inc. 5000 of fastest growing companies in America

oneZero started out by serving the foreign exchange trading community, developing and executing technology that could scale with the growth of the FX market.

Industry News

CFTC wins case against broker for secretly taking other side of client orders in block trades

“As we said at the outset of this case, the illegal use of inside or confidential information undermines confidence in markets and will not be tolerated.”


BankiFi raises $4.8m to bring embedded banking platform to North America

“Our mission is to make all aspects of cash management and payments easier for SMBs everywhere, and this investment is another huge step to making that a reality.”

Executive Moves

Shieldpay hires ex-Payoneer Chris Andrews as Head of Sales

“We’ll be expanding our position in existing markets and accelerating growth into new verticals, whilst building on our direct and indirect channels.”

Digital Assets secures preliminary approval to operate in Canada, one of the longest-established crypto platforms, has become the first digital asset platform to sign a Pre-‘Registration Undertaking’ with the Ontario Securities Commission (OSC) in Canada.

Retail FX

CySEC hits IC Markets One with regulatory warning

The Cyprus Securities and Exchange Commission has once again stepped up its fight against unauthorized brokers.