BitMex to Roll Out Price Indices Changes by End of November to Measure Market Consensus Better
BitMEX, one of the largest crypto derivatives exchanges in the world made an announcement on Nov 1st regarding the implementation of major changes to their price indices in order to remove insufficient trade volume.
The new indices will go live on Nov 22, and the exchange stated that the new indices would help traders to trade against the precise reference price which truly reflects the price of underlying assets. The new indices data would be derived from an additional 3 new index constituent exchanges namely Huobi, Gemini and Itbit. The new indices would also weigh exchanges with bigger trading volume higher.
At present BitMEX draws its indices data from 6 exchanges which include Binance, Bitstamp, Bittrex, Coinbase, Kraken, and Poloniex. The exchange believes its new indices represent the trade price per trade instead of per exchange. They explained,
“BitMEX observes the traded volumes of the underlying asset, obtained directly via an API connection, across each exchange in the constituent universe. Proprietary mechanisms are used to identify malformed and anomalous data, which is discarded. The BitMEX index weights are computed using this volume data with the calculation removing constituents with insufficient trade volume.”
The exchange would also showcase its upcoming indices change via hypothetical price projections to help traders get a grasp of the changes which would go live later this month.
Huobi, the new entrant into BitMEX index data would be weighted at 7 out of the total 9 indices would not be inducted in the.BXBT index which is used for Bitmex popular Bitcoin perpetual swap contracts. Here is how BitMex intends on updating its indices to be more representing of reflecting true market consensus:
However, BitMEX was not in headlines for all the right reasons on Nov 1st, as a grave mistake on the exchange's part resulted in the leaking of 30,000 users' email addresses in public. The derivative platform addressed the issue later and blamed it on a software error which they later claimed to have resolved. They also advised users on being aware of phishing attempts.