Bitmex Dives into Options Trading, Competing with Deribit
Bitmex, a prominent cryptocurrency exchange and derivatives platform, announced on Wednesday that it is expanding its trading offerings by introducing options trading. This new feature allows users to trade a wide range of cryptocurrency options using Bitcoin, USDT, or USDC as collateral.
Bitmex’s Strategic Move
Founded in 2014 by Arthur Hayes and others, Bitmex has been a pioneer in the cryptocurrency derivatives space. With the launch of its options trading, Bitmex aims to reinvent the options segment, collaborating with Powertrade to introduce what they call “Bitmex Options.” This venture into options trading is set to position Bitmex directly against Deribit, currently the leader in the cryptocurrency options market.
Promotional Strategies and Market Impact
To attract users to its new service, Bitmex is offering zero fees on options trades for the remainder of May and a promotional bonus: a $20 reward for trading an option after a $1000 deposit. This aggressive marketing strategy is likely aimed at capturing a share of the market dominated by Deribit, which leads in terms of trading volume and open interest.
Market Dynamics and Competitive Landscape
Deribit is currently the largest Bitcoin derivatives exchange, followed by platforms like Delta Exchange, CME, Okx, Binance, and Bybit. Bitcoin options open interest (OI) peaked in mid-March at over $31 billion, and despite a slight decline, remains robust, particularly in contrast to the recent downturn in spot cryptocurrency market volumes. According to Coinglass.com, the value of Bitcoin options OI currently exceeds $18 billion.
Bitmex’s Confidence and Security Emphasis
In its announcement, Bitmex highlighted several advantages for users choosing to trade options on its platform, emphasizing its secure asset custody. The company reassures its users by stating, “Never worry about asset custody. Since 2014, we have never lost a single token. And that’s just the tip of the iceberg.”
Future Prospects
Bitmex’s entry into the options market signals a significant expansion of its services, aiming to diversify its offerings and tap into the growing interest in crypto derivatives. As the platform positions itself against established competitors like Deribit, the dynamics within the cryptocurrency options market could see notable shifts, potentially influencing market practices and trader preferences in the broader crypto derivatives landscape. This move underscores Bitmex’s commitment to broadening its reach and enhancing its trading solutions in the evolving cryptocurrency market.
