Key highlights:
- BitMEX has lost an enormous amount of its market, and the exchange’s BTC balances indicate this trend
- Two significant events occurred for the exchange that caused many traders to jump ship
- The March 2020 cryptocurrency crash and the October 2020 lawsuit against the company were two defining moments for BitMEx
BitMEX was the number one crypto derivatives exchange in the recent past. But now, it has lost first place in the space. Two significant events happened to the business, causing an exodus of traders from the platform. One of them was the massive sell-off in March due to the pandemic crisis.
During the sell-off, the BitMEX platform performed poorly, which frustrated a large part of its userbase. In October, the exchange faced a twin lawsuit from the U.S. government. In response to these events, many traders decided to pull their BTC from BitMEX and go to other exchanges.
A significant decline in market share
BitMEX has a fair market share regarding the open interest for BTC futures. The percentage decreased by around 13% in 2020. BitMEX’s BTC balance has decreased by over 62% since March 2020. Now, BitMEX is far from its glory days and faces many challenges.
According to data from The Block, as of January 17 of this year, the exchange’s total holdings are around 117,510 BTC.
In December, BitMEX completed the process of verifying all of the platform’s users. Previously, anyone could create an account on BitMEX just with an e-mail address. Now, the exchange is looking to comply with regulations and requires every trader to verify their identity.
Ben Radclyffe, the commercial director of BitMEX operator 100x Group, told The Block that despite the obligatory KYC for users, BitMEX experienced an increase in sign-ups recently. He thinks the recent bull-run attracted more people to the crypto world, and now, they want to trade on a regulated exchange.
Radclyffe believes BitMEX has an advantage over the other platforms, and it is the performance of the exchange in periods of volatility like what we see now. He thinks the future for BitMEX is promising, and regulations play an essential role in the future of crypto services.
