Derivative Exchange BitMEX to Launch Bitcoin-Settled ETH/USD Quanto Futures Contract


The crypto derivatives exchange BitMEX is launching ETHUSD Quanto futures contracts with up to 50x leverage on 5 May 2020 at 04:00 UTC, announced the exchange on Friday. These contracts will expire quarterly and the first one in June.

Unlike perpetual contracts, in Quanto, the difference between the underlying and fixed strike is paid out in another currency.

ETH/USD Quanto futures will be settled in Bitcoin and have a fixed BTC multiplier regardless of the USD Ethereum price. This will allow traders to long or short ETH/USD exchange rate without touching either ETH or USD.

With this new product and one of its kind in the crypto market, BitMEX is offering yet another new trading opportunity on its platform.

Because Quanto futures are immune to exchange rate fluctuations it allows one to invest and derive a payoff purely from the performance of the underlying commodity.

ETH/USD Quanto futures are now available on Testnet under the symbol ETHUSDM20 that will expire on 26 June 2020 at 1200 UTC. With a maximum leverage of up to 50x, they have a fixed Bitcoin multiplier of 0.000001 XBT (100 Satoshis) and contract value of ETH/USD Price * Bitcoin Multiplier (100 Sat/$1).

An attempt to regain market share?

This new product came after the derivatives exchange experienced a denial-of-service attack during the market crash in mid-April that led BTC price to fall to $3,600 on BitMEX.

Since Black Thursday that saw bitcoin price plunging about 50%, the BTC balance on the exchange has been constantly declining. The amount of BTC on the exchange is currently down nearly 32% since the 13th March top.

glassnode BitMEX Balance

Source: Glassnode

This drawdown could be because of BitMEX losing some of its market share to Binance. Also, crypto traders are deleveraging and withdrawing their remaining unused trading capital, according to Coin Metrics.

While BTC balances on other exchanges were also taking a hit, the amount of ETH held by exchanges grew during that period. Bitfinex, however, saw the largest increase in its ETH balance, unlike others that didn’t have a more than 10% increase.

Now, it’s to be seen if BitMEX will be able to recover its lost market share or if the marketplace will see new exchange emerge at the top.

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