$8B In 1 Day: Why Arthur Hayes’ Bitmex Is One Of The Most Talked-About Crypto Trading Platforms
Over the past year, the trailblazing crypto coin-trading platform Bitmex had more than $800 billion traded on its system, and over the summer, broke a new record with $8 billion in trading volume in a single day.
Bitmex is based in Seychelles. Its Wharton-educated CEO and co-founder, Arthur Hayes, works out of Hong Kong.
Hayes wants Bitmex to become the largest trading platform in the world for all assets, not just in crypto, TechInAsia reported. “We want to trade more notional value than the Chicago Mercantile Exchange,” Hayes said.
Described as an “unassuming Bitcoin bull,” Hayes got the itch to trade Bitcoin in 2013 after losing his job at Citibank. Hayes was also a market-maker for Deutsche Bank. Bitcoin saw 10-fold growth 2013, soaring to more than $900. Hayes and two co-founders Ben Delo and Samuel Reed started a Bitcoin derivatives-only trading platform in January 2014.
“In essence, Bitmex is peer-to-peer Bitcoin derivatives trading for expert traders, matching buyers and sellers of derivatives contracts – like futures and swaps – and then acting as a neutral judge of winners and losers based on the terms of the trade. Its biggest unique selling point is that it offers traders the chance to trade with up to 100x leverage – meaning they can make big bets with very small amounts of collateral.” — TechInAsia.
In the early days, Bitmex struggled to gain ground. “Throughout most of 2015, the volumes on Bitmex were pathetic,” Hayes said. “Some days we matched zero trades.” He didn’t quit.
He made a change that multiplied Bitmex’s business when it raised its leverage limit from 3x to 100x in October 2015. Users poured in. “This jumpstarted the liquidity on the platform,” Hayes said. “From there, we steadily acquired market share.”
Bitmex is the only platform of its kind offering that kind of leverage, Tech In Asia reported. “The platform over the past 18 months has become the most liquid place to trade crypto risk globally,” Hayes said. “The combination of leverage and liquidity is how we are able to continually increase the amount of trades matched on the platform.”
“While the Bitcoin bear market might seem like a bad thing to ordinary investors, Hayes says it’s been just fine for Bitmex. ‘2018 will be the best year yet for Bitmex. Liquidity continues to grow. The volatile nature of the crypto markets is perfect for a derivatives trading platform. Regardless of whether the market goes up or down, there are an equal number of winners and losers on Bitmex.'”
The startup is moving out of its modest office in the Hong Kong warehouse district into new offices — the entire 45th floor of Hong Kong’s Cheung Kong Center — described as the world’s most expensive commercial space, according to local media. Monthly rent will be more than $500,000. Hayes’ neighbors will include Goldman Sachs and Bank of America.
You don’t get that big that fast without being criticized.
A headline in AltCoinBuzz on Sept. 12 announced: “ETH Plunged. Has BitMex contributed?”
Ethereum creator Vitalik Buterin made a recent statement, telling Bloomberg that the days of 1,000-times gains in crypto are over.
Following the controversial remark about the capacity for growth in crypto and blockchain, “the price of ETH has been steadily decreasing. And one exchange is said to contribute to the trend. BitMex is its name,” AltCoinBuzz reported.
Buterin subsequently walked back his statement, but the freefall continued. In the space of a week in August, the ETH price fell at least 39.5 percent — from $256 to $173. (As of late afternoon Friday, it was at $216.)
Hayes is not a fan of ETH. In an Aug. 2 tweet, he said “50x leveraged ETHUSD perpetual swap is now live! Trade using only Bitcoin, you never have to touch Ether or USD.”
@I_Am_The_Wizard wrote “Thanks Arthur for making us lose money with your crap site. I hope you get defamed and sued.”
Hayes also called to short sell ETH and advised BitMex’s customers to “punt” on ETH/USD price.
The BitMex CEO has described ETH as a “double-digit shitcoin,” Stocks Gazette reported. In Crypto Trader Digest, a Bitmex blog, Hayes argued that Ethereum’s price was anchored by the 2017 initial coin offering (ICO) boom.
“He believes it’s a matter of time before the price of the second largest cryptocurrency by market capitalization hits the abyss by sinking below $100,” Stocks Gazette reported. He says that most of the investment in ICOs is from venture capitalists who will dump their holdings if the bearish market sustains. For that reason, he believes Ether will tank.
Many analysts have predicted that most digital assets will disappear, with less than 5 percent surviving. Ethereum remains No. 2 with a market cap of $21.87 billion.