It’s Live: Crypto’s First-Ever Perpetual FX Contract

3 Aug 2022

(Any views expressed in the below should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

Today’s the day. A new breed of crypto derivative – the perpetual FX contract – is now live and ready for trading.

It’s an addition that means users can now capitalise on the price movements of some of the most popular foreign exchange (FX) pairs 24/7 – even when the forex market is closed. What’s more, users can post margin – and profit – exclusively in Bitcoin (XBT) and USDT (ERC-20) terms – with up to 50x leverage.

The introduction of FX contract listings is all part of our ongoing focus to enhance the versatility and accessibility of our platform. That’s why we’ve been working hard behind the scenes to broaden our range of contracts and spot trading pairs – and offer crypto derivatives products that allow users to trade different currencies and commodities.

Click here to start trading FX perps today, or read on for the 101 on crypto’s first-ever forex contracts.

If you haven’t yet created a BitMEX account, you can do so here.

The 101 on Perpetual FX Contracts

The perpetual FX contract is a new type of crypto derivative invented by BitMEX. It allows traders to capitalise on price differences in foreign currency pairs, such as EURUSD and USDMXN.

Users who trade our foreign exchange swap contracts can post margin in Bitcoin (XBT) or Tether (USDT ERC-20) – and profit in XBT or USDT terms – as the exchange rate of a specific foreign currency pair changes.

As they’re margined and settled exclusively in crypto, our foreign exchange perpetual swap products can be traded 24/7 – without ever touching fiat currencies. When the FX market is closed and no FX prices are available, the contract will trade around the Friday close.

Like our other perpetual contracts, perpetual FX contract listings on BitMEX also pay a funding rate (i.e. periodic payments to traders that are long/short based on the difference between perpetual contract markets and spot prices). You can learn about how our funding rates are calculated here.

How Perpetual FX Contract Products Work

The mechanics of our perpetual FX contract products are as follows:

FX perps are exchange-traded through a central limit order book (CLOB). The funding rate mechanism assures that the trade price stays close to the index price (which is a composite FX spot price).
- Note: Funding occurs every 8 hours at 4:00 UTC, 12:00 UTC, and 20:00 UTC. You will only pay or receive funding if you hold a position at one of these times.
- When the funding rate is positive, longs pay shorts. When it is negative, shorts pay longs. Examples are available here.
Traders can buy FX perps via limit and market orders. The liquidity of the orderbook determines the spread and slippage in a transparent way.
Our FX contract listings are margined and settled in either Tether (USDT ERC-20) or Bitcoin (XBT).
FX perps allow users to trade with up to 50x leverage, meaning users do not need to post 100% of their collateral as margin.
There are three types of FX contract listings on BitMEX:
- Quanto contracts: This is a type of crypto derivative where the underlying pair is denominated in two assets, but the derivative is settled in a third, “quanto” asset. As with all listings of this type, our quanto FX swaps have a fixed XBT multiplier – regardless of the FX price, a trader will gain or lose a set amount of XBT for a given move in the price (e.g. traders who long 1 contract of USDINR will gain 1 satoshi for every pip (0.0001) move up in the price). You can learn more about quanto perpetual contracts here.
- Inverse contracts: When trading inverse contracts, users deposit a specific cryptocurrency to begin with and these contracts settle in the underlying cryptocurrency (as opposed to the quote currency). For example, users who trade USDT/MXN would receive their payouts in USDT. You can learn more about inverse contracts here.
- Linear contracts: These are linearly-settled contracts that do not directly touch fiat, but pay out with more intuitive USD-like assets (i.e. stablecoins like USDT). You can learn more about linear contracts here.

For an in-depth look at the benefits of FX swap trading, you can read our blog here.

How Many FX Pairs Can Users Trade and Speculate On?

The initial 12 foreign currency pairs are:

EURUSD
EURCHF
EURTRY
USDCHF
USDTRY
USDSEK
USDCNH
USDINR
USDZAR
USDBRL
USDMXN
NZDUSD

Users will be able to trade and speculate on the above FX pairs via an initial 22 perpetual FX contract listings.

BitMEX FX Contract Specs

As with all quanto contracts, our EURUSD, USDCHF, USDTRY, USDINR, USDZAR, USDBRL, USDMXN, USDSEK, NZDUSD, and USDCNH listings will have a fixed XBT multiplier – regardless of the FX price. This will allow traders to long or short foreign currency pairs (e.g. EURUSD) without ever touching fiat currencies.

Users who trade our FX contracts can post margin in XBT or USDT – and profit in XBT or USDT terms – as the exchange rate of a specific foreign currency pair changes. This quanto risk premium may be one of the factors that results in an FX swap trading at a premium/discount to an FX pair’s spot price.

For an explanation of the same concept for ETHUSD, check out this blog post.