BitMEX To Offer Ethereum Futures That Settle in Bitcoin
Last updated on December 8th, 2022 at 09:28 am
Crypto derivatives trading platform, BitMEX, announced recently that it plans to launch a new futures product.
Starting from May 5th, BitMEX users will gain access to ETH/USD futures contracts. This is a major move for BitMEX, as these will be Quanto contracts, which work similar perpetual swaps.
Not only that, but the futures will be settled in Bitcoin, which means that users can bet on the future price of ETH without ever having to own it.
The contracts will also have a fixed BTC multiplier (0.000001 BTC). This means that it will not change, regardless of how the price of ETH moves in USD.
ETH/USD Futures Contracts Details
This is good news for traders who will be able to short or long the ETH/USD market rate without having to own either the crypto or the fiat currency.
The exchange also revealed that the new product will also be available for trading with leverage, up to 50x. Once again, traders won’t have to deal with ETH or USD at all and they can simply post margin in BTC. Once the ETH/USD rate changes, traders will see either profits or losses, depending on the movement.
The futures’ symbol will be ETHUSDM20 and the multiplier, as mentioned comes at the fixed price of 100 satoshis. The value of the contract can be calculated by multiplying the price of the pair with the Bitcoin Multiplier, meaning 100 satoshis per $1.
As for other technical details that traders should know, there are, of course, the fees. The maker fee will sit at -0.025%, while the taker fee will sit at 0.075%. The Base Maintenance Margin will sit at 0.90%, while the Base Initial Margin comes at 2.00%.
The announcement also touched upon the fact that the product comes as a combination of the Quanto feature of the ETH/USD perpetual swap, which already exists on the exchange. As such, it also shares some of the same aspects, including the settlement and expiry of the traditional futures. Basically, what this means is that the contracts will expire quarterly. Since the futures will only go live in a few weeks, on May 5th, the first contracts will expire on June 26th.
First Of Its Kind
While BitMex is certainly not the only derivatives trading platform in the cryptocurrency space, it is certainly the largest and arguably the most liquid.
BitMEX’s announcement made sure to point out that this product will be “the only one of its kind available in the market, and represents significant new trading opportunities on BitMEX.”
The contracts are already available on BitMEX’s testnet. Users can also check out the full contract specs, and the Series Guide for ETH/USD futures contracts.
The new product comes as part of BitMEX’s efforts to improve options and trading tools for its users. Before this, the exchange introduced a feature which it calls Addresses. Simply put, this feature lets users save wallet addresses and make it somewhat easier to retrieve them during future withdrawals.
Of course, as mentioned, Bitmex also already has ETH perpetual contracts, as well as futures. However, the existing futures only allow traders to speculate on the future of the ETH/BTC exchange rate, but not that of ETH/USD. This announcement allows the exchange to make this expanded offering.
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