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Kraken vs BitMEX: 3 Differences To Know Before Trading

Kraken vs BitMEX: 3 Differences To Know Before Trading

We believe that as decentralized exchanges continue to improve, they’ll attract more traders than centralized ones (helped along by tools like DEX.AG). But as long as people keep using centralized exchanges, traders should understand the differences among them. Let’s take a look at how two popular centralized exchanges stack up: Kraken vs BitMEX.  

Kraken vs BitMEX

Location matters

The first question you need to ask yourself when choosing Kraken vs BitMEX is: Where do I live? That’s because BitMEX prohibits “[r]esidents of the United States of America or Québec (Canada) . . . from holding positions or entering into contracts.”

I know some of you are thinking, “I could just use a VPN to make an account.” It’s true that BitMEX doesn’t initially ask for your location. But we urge you to think twice before flouting BitMEX’s rules. In its TOS, the exchange reserves the right to check your identity at any time and “to close . . . accounts immediately and to liquidate any open positions” if a trader has lied about his or her location. So you should always read the terms of service before using custodial services like BitMEX.

On the other hand, US traders can use Kraken’s basic trading features as long as they provide KYC/AML info. But still check the TOS, because some US states impose their own restrictions. Kraken’s new futures platform remains unavailable to US traders, but non-US residents and business that verify their KYC/AML information with Kraken may be eligible to trade futures.

How much variety do you need?

Deciding on Kraken vs BitMEX might come down to what you want to trade. If you want to trade a variety of cryptoassets, you might choose Kraken for its superior fiat and coin selection. Kraken allows its customers to trade 20 cryptocurrencies and 5 different fiat currencies: USD, EUR, CAD, JPY, and GBP. And if you’re looking to fund your account with fiat, Kraken allows you to do so for select currencies.

BitMEX has tons of volume, but it only handles Bitcoin. You can’t deposit, trade with, or withdraw fiat on BitMEX. Plus, although BitMEX lets you trade altcoin and Ethereum futures contracts, the exchange calculates profits and losses on every product it offers in Bitcoin.

Consider your experience and risk tolerance

With Kraken’s recent acquisition of Crypto Facilities, it now offers trading in Bitcoin futures and other products with leverage rates from 2x to 5x. But Kraken mostly serves users looking to do some simple trading or just pick up some new tokens. As noted above, Kraken offers a large selection of coins. The exchange also has sought to improve UI/UX with acquisitions like Cryptowatch. 

In contrast, BitMEX targets experienced traders by offering its customers futures contracts with up to 100x leverage. For someone new to trading, using such a high amount of leverage involves a lot of risk and can lead to you getting BitREKT! Witness BitMEX rekts yourself firsthand at Rek.to. In fact, BitMEX recommends that new users start by practicing on the BitMEX Testnet before risking real funds. But for experienced traders, BitMEX offers a tried and tested set of tools for longing or shorting crypto.

Kraken vs BitMEX: The Verdict

When considering Kraken vs BitMEX, your decision might be made for you if live in the US. Otherwise, the two exchanges provide two different experiences. For simple trading with a variety of cryptoassets, you might choose Kraken. But if you feel more adventurous and want to try futures trading, you could go with either Kraken or BitMEX. If that’s the case, you might pick BitMEX so you can trade with high leverage. However, if you dislike being limited to Bitcoin, Kraken might your best bet.

No matter where you come down on Kraken vs BitMEX, you can keep up with your assets with Settle Portfolio, a free Blockfolio alternative that integrates with Settle’s (also free) professional trading tools like RiskChecker and a built-in BitMEX calculator. Come grab a free Settle account and check it out today!


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