Kraken Vs BitMEX: The Detailed Comparison Guide

Kraken Vs BitMEX: Let The Battle Begins!

Basic Introduction

Kraken, founded by the team of Jesse Powell in 2011 but launched a crypto exchange in 2013. It is considered as one of the largest exchanges as per Euro trading volumes. With the lowest transaction fees, it provides both fiats to crypto and crypto-to-crypto trading facilities. One of the specific features of margin trading provided by Kraken, being appreciated by crypto traders.

BitMEX or Bitcoin Mercantile Exchange was founded in 2014 by Arthur Hayes, Samuel Reed and Ben Delo. It is a bitcoin derivative exchange with different features of leverage trading. With the vision of providing hedging tools in the digital markets, BitMEX provides a high risk/high return venue for individual traders. The exchange also offers perpetual and future contracts along with the leverage of 100x on bitcoin trading.

How To Trade On Exchanges?

Trading on the exchanges can be started by making the account on that platform and linking it with a bank account (fiat-to-crypto exchange) or adding the coins to exchange (if only crypto-to-crypto exchange).

How to trade on Kraken? Exchange is known for registering huge volumes BTC and ETH to USD and EUR markets. So, to start trading on Kraken, you need to create your account first. Then, you have to select from trading pairs to sell or buy the currency (Double check the entries you mark!). Move to the page of "New Order" and select "Simple" form. Fill the three boxes, namely, number of coins, amount of fiat and select from market (immediate execution)/limit option(prices you wanted to set). Finally, click on the "Total" and finally confirm the order. (Market order are executed instantly while limit orders will take time, providing hedge over risks).

BitMEX facilitates perpetual swaps, futures contracts and upside/downside contracts in the crypto derivative markets. So, to start trade on BitMEX, you have to start with the same drill of creating the account and adding the funds onto it. Now you need to place a buy order/long position if you think BTC will increase or click on sell order/short position for decreased prices of BTC. And wait for the appropriate price to trade.

How To Do Margin Trading On Kraken and BitMEX?

Both the exchanges are experts in margin trading in crypto space. So, start exploring how to margin trade on Kraken and BitMEX? Margin Trading refers to the trading method where you can buy the assets you cannot afford by paying a marginal amount for actual value (borrow funds to purchase assets).

How to do margin trade on Kraken? It is like borrowing from Kraken's operating account and opening a position which is more than the balance of the account. Currency collateral is referred to as "margin" used in marginal trading. Trading on Kraken allows the long and short position also. So, let us consider how to short on Kraken while marginal trading. You first have to open the account, let us suppose with 5x leverage (multiplying buying power by 5). Then you need to open the trading window, and fill the same as Action: Sell, Type: Limit, Leverage:5, enter the amount and price and press on "Buy" option. Thus, when the market prices touch the limit price, the position will be closed in case of short margin trading. Therefore, a short/long position involves selling/buying the following trading pairs. In this way, Kraken gives the advantages for various leverage options provided to trading pairs.

BitMEX also follows a similar principle and procedure of marginal trading. The only difference between both of the exchanges which aggravate Kraken Vs BitMEX conflict, Kraken provides the maximum leverage of 5x. At the same time, BitMEX offers maximum leverage of 100x on trading instruments like perpetual contracts and traditional futures with rollover charges for every 8 hours.

One point must be kept in mind that before starting the trade either on Kraken or a BitMEX, you will need to deposit funds in the particular account of the exchange. For instance, if you wanted to trade on Kraken, as the currency conversion is not possible, the same currency with which you wish to trade, must be deposited through Kraken bank transfer or Kraken wire transfer like SWIFT (No credit cards accepted!).

Fee Schedule

Let's discuss the BitMEX and Kraken fee schedule while trading on the platform.

Kraken has the structure of maker-taker for scheduling the fees. It means new users on the platform have to pay 0.16% for market maker orders and 0.26% for market taker orders. Kraken starts decreasing the fees when the trading volume of 30 days exceeds the limit of $100,000. And by any chance, customer profits are around $10,000,000 or more in trades in 30 days; then the fees will reduce to 0% for market maker orders and 0.1% for market takers.

BitMEX charges no fees on deposits and withdrawals. BitMEX trading fees have a relatively more straightforward maker-taker structure. Market taker pays 0.075% while trading in BTC and 0.25% while trading in altcoins. Also, market makers receive 0.025% and 0.05% of rebates on BTC and altcoins trading, respectively.

Final Verdict

After comparing the several higher grounds, it can be vague to conclude that Kraken Vs BitMEX is prominent in the crypto space. As both of the exchanges have different customer bases like Kraken allows trading in listed cryptocurrencies against fiat currencies and suitable for crypto traders interested in spot trading. On the other hand, BitMEX is the affected users who know about trading with derivatives (Bit complicated instrument!).

Thus, your requirements, risks you want to take and your knowledge of crypto markets which shapes the choice of the exchange you will trade on.

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