Trade Zcash Futures on BitMEX


Zcash (ZEC) is the hot new altcoin this fall. Zcash aims to bring complete privacy to digital currency transactions.

Zcash offers total payment confidentiality, while still maintaining a decentralized network using a public blockchain. Unlike Bitcoin, Zcash transactions automatically hide the sender, recipient, and value of all transactions on the blockchain. Only those with the correct view key can see the contents. Users have complete control and can opt-in to provide others with their view key at their discretion.” []

The Zcash genesis block is scheduled to launch on October 28th. After the astonishing rise of Monero over the past few weeks, many traders are equally bullish on Zcash.

ZEC coins will be distributed by mining and earning the block reward; there will be no Initial Coin Offering. As a result, the initial supply of ZEC coins will be limited.

Most traders want economic exposure to ZEC rather than buying, holding, and storing ZEC itself. Futures contracts allow traders to gain long or short exposure without ever touching ZEC.

Zcash funded development partially by pre-selling ZEC coins to investors. A portion of each block reward will be given to initial investors for a period of time. The spot market will be quite illiquid until enough blocks have been mined, and block rewards earned. Initial investors can forward sell their allotment of ZEC by selling futures contracts.

BitMEX is committed to providing price discovery for new and promising digital currencies. We are proud to be the first exchange to allow trading of any kind for ZEC/XBT. The BitMEX Zcash / Bitcoin futures contracts allow traders to go long or short with leverage on the ZEC/XBT exchange rate.

Product Details:

Symbol: ZECZ16
Underlying: ZEC/XBT
Contract Value: 1 ZEC
Quote Currency: XBT
Expiry Date: 30 December 2016 12:00 UTC
Settlement Currency: Margin and PNL are denominated in Bitcoin
Leverage: 2x

Given that ZEC/XBT has not begun trading on any spot market, we do not know which exchange will have the most liquid market. We will make an announcement in early November about which spot exchange will be used for the settlement price.

Getting Bitcoin Away From Its Bad Name – Buying USD, A50 Futures with Bitcoin


The following is a translation of a recent Hong Kong Economic Journal article about BitMEX.

For Bitcoin to be a real currency, it requires more applications. In recent years, more and more Bitcoin based futures trading platforms have emerged for investors to trade Bitcoin against USD, JPY and even the A50 index.

Arthur Hayes, who worked at Citibank as a fund manager, is also a Bitcoin trader. He was conducting Bitcoin arbitrage trading strategies, and made money doing it. He saw Bitcoin’s potential, and therefore started a P2P futures platform called, BitMEX, in Hong Kong. All trades are denominated in Bitcoin, and the platform earns revenue from trading fees.

Investors only need to deposit Bitcoin to trade USD, JPY, A50 and other cryptocurrencies such as Ethereum on BitMEX. PNL is also in Bitcoin. No fiat currencies are used for trading. Investors must buy Bitcoin through other exchanges first, before trading on BitMEX.

Rise of Bitcoin Financial Services

BitMEX has gained over 80,000 users all over the world in just 2 years, and reached 1.5 billion USD of turnover. However, Arthur pointed out that Bitcoin is still not commonly known, most BitMEX users are tech savvy people or people in the IT field. With the rise of Bitcoin, more and more people treat Bitcoin as an asset. Financial services such as investment, deposit taking, and insurance will gradually be introduced. “A lot of people who are un-banked can use Bitcoin or other digital currencies to invest with more flexibility” Arthur pointed out.

Since Bitcoin is divisible, the contract size can be quite small. The contract on Bitcoin / USD is worth 1 USD of Bitcoin. Investors with a fraction of a Bitcoin can easily trade on the platform. “Our contract size is small, and doesn’t have unlimited downside. Users in South East Asia and China who have accumulated a small amount of capital can’t invest in the mainstream markets because the number of products they can trade are limited due to the high buy-in cost.” Arthur mentioned.

Small Buy-in Price Attracts Global Investors

He also indicated that Bitcoin is globally traded. This could attract overseas investors to trade. BitMEX can easily expand with this business model. With June’s volatility in the financial markets, Arthur also saw plenty of investors rushing into the Bitcoin market to protect their wealth.

BitMEX will provide a Chinese interface in the coming year and gain access to the Chinese market. “Over 90% of trades now are happening in China, the largest Bitcoin mining farms are also in China, we believe Bitcoin products will be very successful there!”

Futures are somewhat complicated for the average joe, with the risk of losing all of invested capital by using leverage, some users are on the fence about investing. Arthur plans to wrap contracts into fixed-return Bitcoin products to attracts new investors. He expects BitMEX will reach 1 billion USD turnover in 2017 .

Announcing The Launch of Ether Classic 5x Leveraged Futures

ETC is a special chain quoting the Ethereum Classic pre-fork chain, which is the chain created by the original Ethereum code as it existed before the hard fork.

ETC has proven a very popular digital currency right out of the gate. As a result, BitMEX is pleased to announce the world’s first Ether Classic futures contract, ETC24H.

ETC24H Contract Details:

  • Each contract is worth 1 ETC
  • The underlying is the Poloniex ETC/BTC exchange rate
  • Margin, profit, and loss are all in Bitcoin
  • Leverage of 5x
  • Expires each day at 12:00 UTC, based on the 11:30 UTC to 12:00 UTC time weighted average price of ETC/BTC
  • More details

Traders can go long or short ETC24H using only Bitcoin. No ETC is required.

To begin trading, deposit Bitcoin to your BitMEX account. Then you can place buy or sell orders on ETC24H.

Trade Lisk With Leverage And Bitcoin

Lisk trading launches Friday, May 27 at 12:00 UTC.

Have you heard of Lisk? It’s the hottest new altcoin. It just completed its Initial Coin Offering, raising US$6 million. The coin is now trading on the secondary market. Trading volumes and the price are surging.

Essentially Lisk is a clone of Ethereum, but the scripting language is JavaScript. Whether you are a super bull or think Lisk belongs in a landfill, BitMEX now offers a way to speculate on Lisk using on Bitcoin.

Introducing LSKXBT

LSKXBT is a leveraged trading product that allows traders using only Bitcoin to go long or short Lisk with up to 3.33x leverage. The leverage will increase as liquidity improves.

Each LSKXBT contract is worth 1 LSK, and quoted in XBT. The underlying of LSKXBT is the Poloniex LSK/XBT exchange rate.

LSKXBT does not have an expiry date. Buyers will receive the Poloniex LSK funding rate (when it becomes available, currently set at 0%), and pay the XBT funding rate. Shorts receive the Poloniex XBT funding rate, and pay the LSK funding rate. Read Swaps 101 to learn more about how it works.

Going Long LSKXBT

If you have some Bitcoin, you can go long LSKXBT with leverage.

You want to go long 10,000 LSKXBT contracts. The current price is 0.0001 XBT. The Bitcoin value of 10,000 LSKXBT contracts is 1 XBT. Because BitMEX offers 3.33x leverage, you only have to put up 30% * 1 XBT or 0.3 XBT to go long 10,000 contracts.

The price increases to 0.0002 XBT. Your profit is (0.0002 XBT – 0.0001 XBT) * 10,000 contracts or 1 XBT.

Going Short LSKXBT

If you have some Bitcoin, you can go short LSKXBT with leverage. There is no need to borrow LSK to short it. That’s one of the main benefits of trading BitMEX products.

You want to go short 10,000 LSKXBT contracts. The current price is 0.0001 XBT. The Bitcoin value of 10,000 LSKXBT contracts is 1 XBT. Because BitMEX offers 3.33x leverage, you only have to put up 30% * 1 XBT or 0.3 XBT to go short 10,000 contracts.

The price decreases to 0.00005 XBT. Your profit is (0.00005 XBT – 0.0001 XBT) * -10,000 contracts or 0.5 XBT.

Start Trading Today

To start trading, all you need is a BitMEX account and Bitcoin. The Lisk market opens tomorrow (Friday May 27) at 12:00 UTC.

Register Here

Start Trading

Swaps 101


I Want A Ferrari

I like cars. I would really like to experience the thrill of driving a Ferrari, but I really don’t want to own a car. People who own a Ferrari but don’t drive it often might want to earn some income by loaning out their car.

I would be willing to pay a rate of interest, to drive a stranger’s Ferrari for a short period of time. I am willing to swap an interest payment, for the use of a Ferrari.

Altcoins Are Like Ferraris

Traders love altcoins because they have extreme volatility on the up and downside. Savvy traders can earn substantial sums trading altcoins in a short period of time. However, most traders have no interest in holding or storing altcoins. They just want to participate in the price performance of the coin.

As a result, most altcoin traders prefer to trade on margin. To go long they pledge Bitcoin as collateral, borrow additional Bitcoin and buy the altcoin of their choice. To go short, they pledge Bitcoin as collateral, and borrow the altcoin to short it. In both cases, the traders must pay interest to the lender of Bitcoin or the altcoin.

Just like the Ferrari example above, traders swap interest payments for the performance of the altcoin. Traders have no interest in owning the coin, but they obtain the same economics through a swap.

BitMEX Swap Basics

BitMEX swaps mimic the exchange of cash flows and price performance inherent in trading any currency pair. Every currency pair consists of a base and quote currency. The base currency comes first then the quote currency in any currency pair code. For ETHXBT, ETH is the base currency and XBT is the quote currency.

Imagine you want to buy ETH. You first need to borrow XBT to exchange it for ETH. The person lending you XBT will charge you a rate. Once you have purchased ETH, you can lend it out to someone else.

In this example, as a buyer of ETHXBT, you pay the XBT (quote currency) rate and receive the ETH (base currency) rate. The opposite is true if you wished to sell ETHXBT.

To perfectly replicate the action of borrowing and lending the base and quote currency, buyers of BitMEX swaps must pay the quote currency rate and receive the base currency rate. Sellers of swaps must pay the base currency rate, and receive the quote currency rate.

BitMEX does not operate a lending market for either the base or quote currency, so the rates reference an external third party market.

Buyers and sellers swap interest rate payments for exposure to the underlying asset. Buyers of ETHXBT are long and profit from a rise in price; sellers of ETHXBT are short and profit from a decline in price.

The net of the base and quote interest rates is the Funding Rate. The Funding Rate is charged each day at the Funding Timestamp based on the value of the position. It’s just like a bond. If you hold the bond on the coupon date, you get a payment. If you do not, you get nothing. If you buy ETHXBT and sell it before the Funding Timestamp, you are not eligible to pay or receive the Funding Rate.

Swap Boxes And Arrows

BitMEX Swaps Flow

The diagram above shows the interest payments and performance obligations for buyers and sellers of ETHXBT.

How Are Swaps Valued?

BitMEX intends for swaps to mimic margin trading. Swaps are valued at the prevailing spot price of the underlying asset. For ETHXBT, that is the ETH/XBT exchange rate on Poloniex.

To ensure that the swap’s price does not deviate greatly from spot, each week unrealised profit will become realised at the prevailing spot price. That allows profitable traders to either withdraw their winnings, or either re-leverage them on additional contracts.

Is There Leverage?

Of course, this is BitMEX. Because no physical asset changes hands, BitMEX is able to offer very high leverage on swaps. If two traders wish to trade an ETHXBT swap worth 100 XBT, each side must post at least 4 XBT of margin. If the price declines or rises by more than 2%, the long or short trader will be liquidated. For more information, please refer to the Liquidation document.

How Long Do Swaps Last?

The beauty of BitMEX swap contracts is that there is no settlement date. As long as you can afford to pay the daily funding rate, and the spot price does not touch your liquidation price, you can keep your swap. If you wish to close your swap, trade out of your position in the open market. Buyers close their swaps by sell; sellers close their swaps by buying.

Let’s Trade

ETHXBT is BitMEX’s first swap product. It allows traders to trade the ETH/XBT exchange rate with up to 33x leverage. Traders do not need to own or borrow ETH to trade ETHXBT. Margin, profit and loss are all denominated in Bitcoin.

Trade ETHXBT Today!


Crypto Trader Digest – Mar 28

I Think I’m Turning Japanese


Japan is the unorthodox monetary policy guinea pig. A future of tentacle porn and massive money printing awaits all developed nations. After over two decades of print and pray (maybe try just the tip?), Japan has arrived at the final solution: helicopter money.

Helicopter money, or basic income as many governments label it, is an attempt to jump start spending by handing cash directly to consumers. Instead of enriching only those who hold real assets (stocks, bonds, and real estate) via central bank bond buying, Japan will hand out vouchers to low-income young people so they may purchase “daily necessities”.

Helicopter money is nothing new. Some European countries have experimented with this flavor of money printing as well. The difference is that Japan has the world’s largest government debt load as a percentage of productive output. The BOJ puts other central banks to shame in their attempts to reflate a dying economy and country.

Japan produces some of the world’s most delicious produce (make sure it’s not from Fukushima), but imports virtually all of its energy needs. Abe-san and Kuroda-san’s policy of massive money printing trashed the yen, and made life for ordinary Japanese citizens very expensive. First it will be young poor people, soon it will be most able-bodied adults who will receive some form of government handout. The only result will be a cheaper yen, and rampant energy and food inflation. Even though Japan has a healthy farming sector, farmers still need to consume imported energy to grow and transport their crops.

Japanese housewives are renowned for their penchant to speculate in foreign exchange. What happens when they discover Bitcoin and other digital currencies? They can be bought over the internet (Japan has the world’s fastest internet after South Korea), and instantly they can protect and store their wealth. While the USD is the cleanest dirty sheet, it will get trashed as well vs. gold, digital currencies, and other real assets once Grandma Yellen goes negative.

Most of you aren’t Japanese; however that doesn’t mean BitMEX doesn’t have a way for you to profit from Kuroda-san’s freebasing habit. In the next few weeks, in cooperation with Quoine (the largest Bitcoin / Yen exchange), we will launch a daily Bitcoin / Yen futures contract: XBJ24H. Japanese traders will have direct access to XBJ24H through their account with Quoine, and BitMEX will also offer the product via our platform.

Japan Goes Full Krugman: Plans Un-Depositable, Non-Cash “Gift-Certificate” Money Drop To Young People

Brexit Maybe?


The odds of Brexit are climbing, averaging 35% across various betting platforms. Some unofficial polls put the “Leave” vote above 40%. The referendum will be held on June 23rd.

Brexit would be catastrophic for the EU project. EU skeptic parties continue to poll better and better. If one of the richest countries in Europe leaves the EU project, the calls for Portugal, Italy, Greece, and Spain (the PIGS) to exit from their citizens will gain force.

All of the PIGS have massive debt problems. Either they continue suffering from high unemployment, or devalue and accept their old domestic currency. These are the only options to regain competitiveness vis-a-vis ze Germans. After 7 years of “austerity” the plebes are fed up. However, they have been sufficiently scared about the possible post-EU apocalypse to vote themselves out of the Euro. That all changes if Brexit occurs.

The Bitcoin rocketship will ignite if the odds increase further. To gain an appreciation for the positive price effect, chart Bitcoin during the Grexit saga last summer. Brexit is still too far in the future and the odds too low to be on many traders’ radars yet. It is the perfect time to go Bitcoin volatility if one believes that the likelihood of Brexit will increase.

The BitMEX Bitcoin / USD September futures contract, XBTU16, is the ideal product to trade. It settles well after the referendum date. If Brexit does occur, the whole of Europe will decend into chaos over the summer. Greece is out of money again, surprise surprise. They will be back at Merkel’s feet begging for more cash this summer. Maybe this time around the population will follow through on their threat to leave the Euro, and redonominate their debt into Drachmas. These fears will multiply and cause a bid for safe-haven assets like Gold and Bitcoin if Brexit occurs. The aftermath will be more wild than the Brexit vote itself. These fears will be priced into markets if the odds of Brexit increase. That is why a contract like XBTU16 that expires in the fall will be bid up if the odds of Brexit increase.

XBTU16 currently trades at a 62% per annum (PA) premium. Historically, three and six month BitMEX contracts have traded between 40% to over 100% PA premiums. If the Brexit odds increase, XBTU16 is poised to trade at the upper end of that range. In order to isolate the XBTU16’s premium, buy XBTU16 vs. short selling spot Bitcoin.

Brexit Referendum Betting Odds

NYT Kneels At The Alter Of Ether


I wanna get down on my knees and start pleasing Jesus, I wanna feel his salvation all over my face!

— Faith +1

Ethereum is on the warpath and is zeroing in on Bitcoin.

A recent article published by the New York Times (NYT) describes it as a Bitcoin 2.0, a new currency that can overcome obstacles which Bitcoin can’t. Having risen by nearly 1700% in the past three months from trough to peak, it is clear that Ethereum is a serious contender and is now the 2nd largest Cryptocurrency available, overtaking the likes of Litecoin.

Is this exponential rise going to continue? The price has been plateauing lately, almost taking a breather; however no doubt there are a lot of traders with fingers twitching over that buy button, myself invcluded. Anyone who was trading Bitcoin back in 2011 and 2012 must surely feel some sort of déjà vu.

Why has it come to this? The article highlights a few reasons, some of which the Bitcoin community are highly aware of already. Firstly, this tedious battle on the future of Bitcoin between Core and Classic has led to a number of startups and traders lacking the confidence to invest further into the currency and look for alternative virtual currencies. We can all agree that trading Bitcoin over this period has been lacklustre and boring, and until we have a clear answer on what is going to happen I don’t think we are out of this rangebound yet.

Furthermore, Ethereum provides a way to create smart contracts easily. Personally I think this is huge – already the finance community are looking into this and has gained a lot of attention from companies such as JPMorgan, Microsoft and IBM. Smart contracts can save a whole lot of time and money, especially in finance and banking where traditional contracts (such as in inventory financing) can take days if not weeks to execute. Backoffice functions benefit as well, which have a number of different databases and clutter in which a number of things can and will go wrong (being told you are short $5 bucks of an illiquid stock on settlement day and you’re going to enter a ‘buy-in’ was never a fun thing to hear from your backoffice).

Given the fact that the NYT is almost ‘pumping’ ETH, I would suggest to get on board the gravy train. We should witness further news forthcoming about it if discussions between Core and Classic do not go anywhere and Bitcoin remains in a deadzone. This all points to one way ticket for ETH. I recommend buying the dips – anywhere below 0.024 Ether / Bitcoin is attractive. BitMEX is the only exchange to offer a 25x leveraged Ether / Bitcoin futures contract, ETH7D, so get your bids in early and enjoy the ride.

How To Trade Factom

The hottest new altcoin on the block is Factom (FCT). Factoid is the token used to power the Factom protocol. Although technically incorrect, BitMEX calls the token as Factom. Now that Factom is freely tradable, this post will explain the different ways to express bullish and bearish views on this new cryptocurrency.

Spot Trading

Buying and selling Factom on a spot basis is quite simple. The most liquid Factom currency pair is Factom/Bitcoin (FCT/XBT). Poloniex is the leading exchanges by volume.

Buying Factom

To buy Factom, send Bitcoin to the exchange and exchange it for Factom. This must be done on a fully funded basis (i.e. there is no leverage).

Selling Factom

If you hold physical Factom, you can exchange it back for Bitcoin. Selling Factom you don’t possess is not possible.

Leveraged or Derivatives Trading

For most of the readers of this blog, leveraged trading / speculating presents a more interesting way to trade Factom. With the exception of Bitcoin and Litecoin, leveraged or derivatives trading on altcoins was not possible. BitMEX recognised that Bitcoin traders would like to speculate on Factom with leverage and using only Bitcoin as margin.

BitMEX recently launched the FCT7D, a weekly expiring FCTXBT futures contract. Each FCT7D contract represents 1 FCT. The contract expires each Friday at 12:00 GMT on the FCTXBT exchange rate. All margin, profit, and loss are conducted in Bitcoin. The maximum leverage allowed is 10x.

Buying Factom Futures

BitMEX Factom futures contracts allow traders to speculate on the future value of the FCTXBT exchange rate. A trader who wishes to go long 1,000 FCT, must buy 1,000 FCT7D contracts. The beauty of FCT7D is that it requires Bitcoin as margin. The maximum leverage is 10x. If the FCT7D price is 0.005, the trader must post 0.5 Bitcoin as margin (1,000 Contracts * 0.005 FCTXBT * 10%). If the price rises to 0.006, the profit is 1 Bitcoin = (0.006 – 0.005) * 1,000.

Selling Factom Futures

Short selling, or selling something you don’t possess is usually impossible with altcoins. Using FCT7D, traders are able to placed leveraged bearish bets on Factom as long as they own Bitcoin. For example, a trader who wishes to go short 1,000 Factom, must sell 1,000 FCT7D contracts. Again only Bitcoin is required for margin. If the FCT7D price is 0.005, the trader must post 0.5 Bitcoin as margin (1,000 Contracts * 0.005 FCTXBT * 10%). If the price falls to 0.004, the profit is 1 Bitcoin = (0.004 – 0.005) * -1,000.

Placing leveraged trades, and shorting Factom using only Bitcoin is only possible with BitMEX’s FCT7D futures contract. FCT7D Contract Description

Start Trading Factom Now

How To Roll Daily BitMEX Futures

Many traders and market makers have asked for a way to roll their daily Bitcoin / USD futures contracts (XBT24H) from day to day. Each day at 12:00 GMT, any open position on XBT24H vanishes and traders must go long or short again. For traders wishing to have a constant exposure or hedge over the expiry and settlement period, a way to roll XBT24H contracts from day to day is desired.

BitMEX has now listed a 48 hour Bitcoin / USD futures contract, XBT48H. XBT48H expires every 24H, and becomes XBT24H, which will then expire 24 hours later. XBT48H will immediately re-list every 24H.

Expiry And Settlement

You buy 1,000 XBT48H contracts on T at 12:01 GMT. At 12:00 GMT T+1, the XBT48H expires and your long 1,000 contracts of XBT48H becomes a long position in XBT24H. Your average entry price is not affected.

Rolling XBT24H

Traders can use XBT48H to effectively roll their XBT24H position from day to day with very little market slippage.


You are long 1,000 XBT24H contracts at $500 and you want to keep your long position after XBT24H expires.

You buy 1,000 XBT48H contracts at $500 and sell 1,000 XBT24H contracts at $500 before XBT24H expires and settles. You now have a long 1,000 XBT48H position.

When XBT24H expires at 12:00 GMT. Your long 1,000 XBT48H position becomes a long XBT24H position, which will expire and settle in 24 hours.

XBT24H_48 Calendar Spread

Once traders become comfortable trading XBT48H, we will list the XBT24H_48H calendar spread. The calendar spread will have its own orderbook, which will make rolling XBT24H contracts even easier and cheaper.

We believe that the addition of the XBT48H contract will help market makers manage their positions better, which will in tern lead to more liquidity on BitMEX.

Crypto Trader Digest – Feb 15

New BitMEX API Goodies


If you have been following BitMEX Testnet, you will have noticed many new features. We are rolling them into the live exchange over the following weeks.

Today we have released new order placement methods and order types.

New Placement Methods:

For market makers, bulk order placement and amend is now available through the API. Previously, to amend an order, one had to cancel and replace the order. Now amending order quantity of price is available both for single orders and for groups.

All bulk operations execute atomically and fail as a group if any order is invalid.

New Order Types:

We’ve added standard Market and Stop Market orders to the available order types. We’ve also added the following advanced orders:

OCO (One Cancels the Other) – OCO orders allow traders to place simultaneous Stop and Take Profit orders. When one order is triggered, the other will be cancelled. Via the API, any number of orders can be linked, allowing very advanced trading strategies, especially in combination with:

OTO (One Triggers the Other) – OTO orders allow orders to be automatically placed one a primary order fully executes. Certain

Trailing Stop – A Trailing Stop follows the current market price at an offset, enabling a trade to remain open, yet closing if the market changes direction by a certain amount.

Post-Only – Post-Only orders ensure that if it would execute against the market, it would be canelled, ensuring your order receives the Maker rebate.

Many of these new order types will be exposed on the frontend shortly. Please view the API Changelog for a complete rundown of the new features.

NIRP Or Bust


While China was celebrating the Year of the Monkey, the global banking system began crumbling. Europe once again became the epicenter of banking woes. Lead by Deutsche Bank, banks across Europe received their humble pie. The bankers began crying out for Super Mario Draghi to outlaw cash, so that NIRP can be pursued even more aggressively.

Net Interest Margin (NIM) is the secret sauce of banks. The nominal level of interest rates doesn’t matter as long as the bank can earn a spread between depositors and the lending book. The only lending banks do these days is to central banks. Therefore, they need to earn a spread between what the pay or charge their depositors and the interest they receive or pay on their reserves with the central bank.

Banks cannot pass on greater charges to their customers than they pay at the central bank while physical cash exists in abundance. If banks push rates too negative on their borrowers, a bank run will ensue. Interest rates will continue to go lower and as they do measures will be put in place to effectively ban cash. Today Super Mario decreed that Toadstool will no longer receive fresh new 500 Euro notes aka Bin Ladens (you’ve heard about them, but never seen one).

Central banks are listening, and this is just the first action in a series of many that will stamp out physical cash. Europe is ground zero for NIRP. The successful measures will be employed rapidly by all major economies. Those who sell first, sell best.

The War On Paper Currency Begins: ECB Votes To “Scrap” 500 Euro Bill

Trade The China Stock Market With BitMEX And Bitcoin

China’s stock market is one of the most difficult markets for non-Chinese to access.  Even for normal Chinese investors, trading with leverage both on the long and short side is almost impossible. BitMEX is committed to providing investors access to global markets using Bitcoin.

BitMEX’s China A50 Equity Index Futures Contract allows investors who possess Bitcoin the ability to speculate with leverage, long or short, on the Chinese equity market.

How Does It Work?

The China A50 Equity Index comprises the 50 biggest companies in China. The index is priced in CNY. However, investors using the BitMEX product will receive 0.0001 Bitcoin (XBT) per 1 CNY move in the index.

This is great for investors because if the China stock market rises by 10% and you are long, your futures contracts will be worth 10% more as well. The same is true if you are short.

What Are The Trading Hours?

The China stock market is open daily from 09:15 to 11:30 and then 13:00 to 15:00 Beijing Time (GMT + 8). Even though the stock market is only open Monday to Friday for 4 hours and 15 minutes, the BitMEX China A50 futures contract trades 24/7.

How Does Settlement Work?

The BitMEX China A50 futures contract has monthly expiries. The contract expires based on the closing price of the BitMEX CHINA A50 Index to two decimal places. The closing price of the index is calculated using the last traded prices of the 50 index members. The settlement date is the 2nd to last business day in China of each month.

Your profit is determined by the difference between your entry price and the settlement price. For example, if you bought 100 A50G16 (February 2016 expiring) contracts at 10,000 CNY and the settlement price was 11,000 CNY, your profit would be 10 XBT or (11,000 CNY – 10,000 CNY) * 0.0001 XBT * 100 Contracts.

Is There Leverage?

The BitMEX China A50 futures contracts allow investors to trade with up to 25x leverage. If you want to go long 100 XBT of China, you only need to deposit 4 XBT of equity. Because of the high leverage, the BitMEX China A50 futures contracts are margined according to the Dynamic Profit Equalisation system.

How Do I Get Started With BitMEX?

If you don’t have a BitMEX account, Register Here. Once you have registered, go to your Deposit Page and you will be given a unique deposit address where you must send Bitcoin. Once BitMEX has received your Bitcoin, it will be credited to your account and you can begin trading.

Crypto Trader Digest – Feb 2

You Like It Hard Or Soft, Baby?


Core, Classic, Hard Fork, Soft Fork, SegWit, …the number of terms and proposals released regarding the block size debate has become daunting. We traders are simple creatures. Whether hard or soft, the word fork doesn’t sound auspicious.

As the debate drags on with no implemented solution, the upper ceiling on Bitcoin’s short term price hardens. Since the Bitcoin Hearnia, the price has been unable to hold $400. The $350 to $400 range holds true, and absent a macro economic catalyst the risk of a break below $350 and a retest of $300 grows.

While I believe in the soundness of my Yuan devaluation call, I would not take long term outright long positions. The flurry of technical announcements have usually been price negative as the community further divides.

The addition of leverage is both a blessing and a curse. Using BitMEX futures contracts to construct spread or arbitrage trades and adding a healthy dose of leverage is the preferred strategy in these choppy times.

2016 will witness bans on physical cash, negative interest rates, and competitive devaluation. These trends are all net positive for Bitcoin. Use the dips in the market to go long volatility and interest rates. Buying BitMEX quarterly (XBTH16) or bi-quarterly (XBTM16) futures contracts vs. shorting the weekly (XBT7D) contract is an appealing spread trade. The negative carry of the long dated futures contracts can be covered by selling XBT7D and short rolling week to week. The strategy is price neutral and benefits if volatility and or interest rates rise. Volatility and interest rates will rise during a sustained upward Bitcoin rally, especially if there is a shocking macro economic development precipitating the price movement.

We recently concluded our series of arbitrage webinars. Over the course of four lessons, I explained the basics of arbitrage and basis trading on BitMEX. Please visit the BitMEX YouTube Channel to view the lessons.

Gepetto’s Children


Central bankers are well-paid liars. Last week the BOJ inflicted max pain on JPY longs when they announced negative interest rates. In the weeks leading up to the policy change, Kuroda-san stated that the BOJ would not go negative in the near future. After sippin’ bubbly in Davos, he had a change of heart and decided to cross the Rubicon.

This action confirms the futility of QE. Japan has suckled on the money-printing teet for over two decades. The results: an economy stuck at 0% growth. Even with the gobs of money floating in Japan, the Nikkei has still failed to retake its 1989 high. Faced with failure, they entered the last stage before helicopter money: NIRP. Two of the four most important central banks now employ NIRP (ECB and BOJ). The Fed hasn’t joined the party yet, but that is probably only one presidential election away. Trump or Sanders may not like the fed, but Grandma Yellen still has two years left. If the S&P 500 touches 666 again, you can bet the Fed will roll out all the stops to keep the dream alive.

The PBOC joined the party late, but they are ginning up Mao’s printers. As the calls for a Yuan devaluation crescendo, the PBOC holds steadfast that the Yuan will not devalue. They even trolled George Soros in the People’s Daily for even hinting that he might short the Yuan. China does not have the time or political will to internally devalue by firing millions of migrant laborers, and allowing SOE firms to fail. The Yuan must and will devalue.

Now that two of China’s biggest export competitors are trashing their currencies in hopes to export deflation and goods abroad, China must respond forcefully. The PBOC has been busy abusing Yuan shorters and closing the gates on the obvious ways that capital flees the country. The legal yearly limit for FX is $50,000 per comrade. China has $3.3 trillion in reserves. It would take only 5% of China’s 1.3 billion population to convert their legal amount of Yuan into a foreign currency for the reserves to be depleted this year. There is no way but down.

The PBOC attempted the slow and steady approach. However, unpatriotic comrades began front running them, as evidenced by the widening gap between CNH and CNY. The PBOC then went nuclear on CNH shorts by cornering the spot market and kicking foreign banks out of the onshore market. All the while proclaiming, all is good and no further devaluation will occur. Liar liar pants on fire!

The PBOC will orchestrate a China style devaluation, big, bold, and in your face. It will happen when people least expect it, or are least prepared to react. The Chinese New Year holiday presents an excellent opportunity to shock the markets. Going long XBTCNY vs. short XBTUSD with futures, spot, or a combination of both is an asymmetric bet. Worst case, the PBOC keeps the Yuan stable and continues to bleed FX reserves. Best case, the PBOC devalues big and Bitcoin goes nuts.

If you place trust in Gepetto’s Children, I have an apartment in Ordos to sell you.

China Warns Soros Against Starting A Currency War: “You Cannot Possibly Succeed, Ha, Ha”

BitMEX Arbitrage Lesson 4 Webinar

Topics covered in Lesson 4:

  • Delta
  • Theta
  • Bitcoin Value of 1%
  • Portfolio Risk Management

The Webinar will air Thursday 28 January 03:00 GMT.

Webinar Link

You can listen live, and after the presentation ask questions. If you are unable to tune in, a recording will be made available shortly after the broadcast is finished.

Supporting Materials: