BitMEX Loses its Dominant Position; Competition Among Binance, ByBit, & Others Heating Up


Since starting the month, the price of bitcoin has weathered numerous storms.

From KuCoin’s $281 million hack, US President Donald Trump testing coronavirus positive, UK’s FCA banning crypto derivatives to FATF red-flagging hardware wallets, Europol prioritizing privacy wallets, and of course, BitMEX’ indictment, BTC held through it all.

The leading digital currency kept to $10,000 strongly, and went as high as $11,500 last week, recording a 5.24% increase.

However, the same couldn’t be said of the popular crypto derivatives platform BitMEX which saw its BTC balance decreasing by 30%.

As a matter of fact, BTC futures annualized rolling 3-month basis actually went negative on BitMEX while on FTX, it was +6.52%, +6.30% on Binance, and +5.65% on Deribit.

Although still having a 6% difference to other exchanges, it is now gradually moving upwards to 4%.

Bitcoin futures on the platform are also trading at a discount at $11,460 compared to $11,527 on Kraken, $11,582 on Deribit, $11,594 on FTX, and OKEx, and above $11,600 on both Huobi and Binance for the month of December.

Stealing BitMEX”s Share

Meanwhile, open interest on the exchange went down hard to 35k BTC on the weekend, from the high of 55k BTC, $615 million right before the crash in direct response to criminal charges brought on by the CFTC and DOJ.

OI on BitMEX does not show any signs of slowing down its decline, although currently, it sits at 36k BTC, about $413 million.

Meanwhile, other platforms are capturing this as this month; the total OI increased by 16.6%.

While percentage-wise, FTX saw the biggest jump of 51.2% ($85 million), OKEx was the one that recorded the largest spike in absolute terms at $110 million (13.5%), as per Skew.

Besides BitMEX every platform experienced a rise in their open interest: CME 43.4% ($150 million), Deribit 35% ($60 million), Kraken 26% ($11 million), Bakkt 23% ($3 million), Binance 22.3% ($93 million), Bybit 19.6% ($76 million), Huobi 8% ($41 million), and Bitfinex 4.8% ($3 million).

Binance has actually taken the leader position in the space in terms of open interest with Bybit close behind, surpassing the OI on BitMEX. Vetle Lunde, an analyst at Arcane Research, noted,

“BitMEX has lost its dominant position while the competition in the derivative markets has been sharpened as more exchanges have gained traction.”

Open Interest Distribution

Source: Arcane Research

Traders left BitMEX but didn’t leave the market; they have moved on to other exchanges to trade perpetual BTC contracts.

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