Bitcoin Forum

Interesting thread here about this - https://www.reddit.com/r/BitcoinMarkets/comments/a42ndz/bitmex_btc_settled_futures_is_killing_the_btc/?sort=confidence

I don't know what it is about traders, but they always seem to congregate to the shittiest and most damaging service providers they can find and let them dominate the market. Once upon a time it was the Chinese zero fee casinos, then it was Bitfinex, these days it's Bitmex.

With dwindling real world demand it's gradually gotten to the stage during the course of this year of spot markets basically existing primarily to be fucked with so contracts on Bitmex could be fucked with, hence the insta pump and dumps that have been happening everywhere.

Anyway the poster's theory is this -


'When a contract settles or is sold on a BTC settled futures platform, the winner gets BTC (both short and long winners get BTC). The spot (fiat) market controls the settlement price and cannot be bought up with BTC. It can ONLY be sold down with BTC.

In a normal market there would be competing long traders offsetting the short traders. These long traders would be attempting to manipulate the spot up and therefore profit from their futures contract longs. This cannot happen in a BTC settled futures market without massive outside cash reserves. There is no way for a long trader to make fiat in order to buy the spot market up, they can only make BTC. The manipulation process ONLY works to the downside on BitMEX BTC settled futures. Since BitMEX is far and away the most volume, there is no competition for the short manipulators.'


'Manipulation' is a tired trope and I certainly don't think this fall was anything but inevitable. It was going to happen no matter what.

All the same, what do you think of Bitmex's place in all this? And what would the effects be when it eventually fades away?

The main reasons are/were leverage and lack of KYC, and secondarily, access to lots of altcoin markets. These are features you can't find on legitimate, tightly regulated exchanges like Coinbase or Gemini.


It's a somewhat convincing story, and there are definitely some nuggets of truth regarding the difficulty in offsetting spot sellers from Bitmex. GDAX used to allow crypto-collateral margin trading (up to 3x) for accredited investors but stopped after an ETH flash crash. Bitstamp doesn't offer it.

However, Kraken does allow margin trading up to 5x and traders can use BTC and ETH as collateral. Presumably long traders can buy up the market there more easily.

At the end of the day: if not Bitmex, it'll be another leveraged futures market.

Yup its bitmex, look at the volume.

They made 18k btc for their insurance fund in 6 months? :D