Cryptocurrency exchange BitMEX announced a new Ether (ETH)-based futures contract on its trading platform.
According to an April 24 announcement, the new derivative contract will feature a fixed Bitcoin (BTC) multiplier which will be unaffected by the Ether price in U.S. dollars. BitMEX explains that this feature allows traders to long or short Ether’s USD exchange rate without holding either ETH or dollars. The announcement explains:
“Traders post margin in XBT [Bitcoin], and earn or lose Bitcoin as the ETH/USD rate changes.”
The exchange plans to launch the ETHUSD futures contracts with a maximum leverage of 50x on May 5, 2020. The firm promises that the “new product will be the only one of its kind available in the market.”
The new BitMEX derivative contract combines the Quanto feature of the exchange’s ETHUSD perpetual swap contract with the expiry and settlement of traditional futures contracts. The contract expires quarterly, just like the firm’s altcoin futures contract.
BitMEX losing ground to competitors
BitMEX is well-known by old-school Bitcoin derivatives traders, as the platform used to be the most widely used for trading these kinds of contracts. However, as Cointelegraph reported earlier this week, BitMEX is continuing to lose derivatives trading market share to Binance Futures.
A mid-April data analysis shows that BitMEX has been bleeding Bitcoins since Black Thursday. This seemingly suggests that traders lost faith in the platform after it malfunctioned during the major market downturn, with some believing that it was — in fact — purposeful market manipulation on the exchange’s part.
BitMEX may be betting that the new contract may help the exchange regain some of its lost popularity among cryptocurrency derivative traders. A BitMEX spokesperson told Cointelegraph:
“We anticipate that our new ETHUSD quanto futures contract product will be popular amongst BitMEX users from launch on May 5, and we're encouraged by the positive reaction we've received from the market already, pre-launch.”