Since Q4 2021, BitMEX users have utilized Bitcoin and/or Tether (ERC-20) for margin and settlement. However, this is about to change with the introduction of ETH-margined contracts tomorrow.
Before ETH margin and settlement features arrive on our platform, this blog explores cryptocurrency margin trading in-depth—along with key details about our Ethereum-based margin contracts.
Continue reading to learn more or deposit ETH into your BitMEX wallet today.
What Does Margin Mean in Cryptocurrency Trading?
Margin trading enables users to open positions significantly larger than their actual balances by borrowing funds from third parties like exchanges (e.g., BitMEX). Often termed "leveraged trading," it amplifies purchasing power, allowing traders to magnify potential profits—and risks. This differs fundamentally from standard spot trading.
In crypto derivatives, margin refers to the capital required to enter a leveraged position. Thus, when we label contracts as ETH-margined, we mean Ethereum serves as both the collateral and settlement currency. Upon launch, available ETH-margined contracts will be inverse: ETH is the base/margin currency, while USD is the quote/nominal currency. Notably, this lets you trade ETH/USD without direct USD exposure.
On BitMEX, traders don’t need to pledge 100% collateral as margin—enabling leverage up to 100x on select contracts. In essence, users can control nominal positions multiples larger than their deposited funds.
Initial vs. Maintenance Margin: Key Differences
Each BitMEX contract specifies initial and maintenance margins:
- Initial Margin: Minimum capital needed to open a position.
- Maintenance Margin: Minimum capital to keep the position open. Falling below this threshold triggers liquidation, forfeiting the margin.
Cross-Margin vs. Isolated Margin
BitMEX offers two margin modes:
- Cross-Margin: Collateral is shared among open positions with the same settlement currency (e.g., ETH). The system automatically draws from the total account balance to prevent liquidation (default setting).
- Isolated Margin: Margin is restricted to a fixed amount per position. If funds dip below maintenance levels, the position liquidates. Traders can adjust leverage dynamically via a slider.
Currently, BitMEX provides perpetual and futures contracts margined in XBT or USDT (ERC-20). Tomorrow’s update introduces ETH-margined contracts.
👉 Discover how ETH-margined contracts enhance trading flexibility
ETH-Margined Contract Specifications
- Launching May 31, 04:00 UTC: A perpetual swap (ETHUSD_ETH) and June (ETHUSDM22_ETH) + September (ETHUSDU22_ETH) futures will list. These ETH/USD contracts feature inverse payouts, with USD as the nominal currency and ETH as collateral. Contracts become visible 24 hours pre-launch—details are already available. Post-launch, ETHUSD_ETH will appear in the 🔥Hot section.
- Depositing ETH: Users must deposit ETH to trade ETH-margined contracts. Options include transferring existing ETH, buying ETH via fiat, purchasing ETH via BitMEX Spot, or converting other cryptos to ETH.
- ETH-Exclusive Margin: ETH can only collateralize ETH-margined contracts (denoted by "_ETH" suffixes).
- API Notes: Margin currency appears as Settlcurrency in Gwei within the Instrument table. Calculations use Gwei (1 ETH = 1 billion Gwei) to accommodate microtransactions.
- Cross-Margin Utility: Traders can share margin across positions using the total account balance of the respective currency.
- Insurance Fund: An ETH balance will backstop liquidations for ETH-margined contracts. The fund is allocated across margin currencies and periodically rebalanced.
Coming Soon: Additional Listings
June marks a pivotal month:
- XBTN22 Monthly Futures: Live June 1, 04:00 UTC.
- Q3 2022 Futures: Launching June 15, 04:00 UTC.
Stay tuned for updates.
BitMEX Spot Raffle Reminder
Until July 17, 23:59 HKT, BitMEX users trading ≥$250 in crypto on BitMEX Spot automatically enter our largest-ever raffle for a chance to win shares of $1M in crypto and prizes. Learn more here.
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FAQ Section
Can I use BTC as margin for ETH-margined contracts?
No. ETH-margined contracts exclusively require ETH as collateral.
What happens if my margin falls below maintenance levels?
Positions liquidate automatically, and the maintenance margin is forfeited.
How do I switch between cross-margin and isolated margin?
Navigate to account settings on BitMEX to toggle margin modes.
Is ETH-margined trading riskier than BTC-margined?
Risk depends on leverage and market volatility, not the collateral currency itself.
For further queries, contact BitMEX support.