Lately, centralized exchanges like BitMEX and Kraken are advancing rapidly, thus attracting a big community of traders as compared to other centralized exchanges in the market. However, as long as traders keep trading on these centralized exchanges, they should understand the differences among them. Here is comprehensive comparison between two popular centralized exchanges Kraken and BitMEX exchange.
Introduction to Kraken and BitMEX
BitMEX is known as Bitcoin Mercantile Exchange. It is basically a Bitcoin derivative trading platform. Registered in Seychelles it was established in 2014. The platform offers unmatched trading services and products around the globe except for the US because of reforms implemented by their government. The exchange is not a compatible option for new traders as it specializes in the derivative medium based on decent leverage trading features.
However, the platform provides deep BitMEX liquidation to its users and has a daily trading volume of over 35,000 BTC with over 540,000 monthly accesses.
Established in 2011, Kraken is a US-based crypto exchange. It is one of the markets biggest crypto exchanges in terms of high Bitcoin liquidity and trading volume. It is accessible across multiple countries and locations including United States (except New York), European Union, Canada, and Japan. Moreover, this platform is also famous for its low trading fees in the market and is also the most well-funded exchange.
Kraken is specialized in spot trading along with its margin trading specifications for popular crypto assets that are not short of any other exchange.
Importance of Location
The first thing to consider while choosing between these two crypto exchanges is location. The reason behind this is that the BitMEX exchange prohibits residents of US or Québec (Canada) from holding positions or entering contracts because of governmental regulations.
Users in those regions also use a VPN at their own risk to make an account. But you must think twice before flouting BitMEX policy because in its TOS (terms of services), the exchange reserves the right to check your identity at any time and to close and liquidate accounts immediately if a user has lied about location. So, always go through the TOS before opting for custodial options like BitMEX.
On contrary, US citizens can use Kraken exchange spot trading specifications as long as traders provide the KYC/AML information. However, users should still read the TOS, because some US states implement their protocols.
Coming to a decision on Kraken versus BitMEX exchange may come down to a single aspect that what kind of a trade you want to make. If the user needs to trade a variety of financial crypto assets, then Kraken is a more compatible option because of its prevalent coin and fiat support. Kraken permits its clients to exchange 20 cryptos and 5 distinct fiat currencies such as USD, EUR, CAD, JPY, and GBP. What’s more, in case you’re planning to finance your account with fiat, Kraken permits you to do so for selected currencies.
BitMEX exchange has huge loads of volume, although it only trades in Bitcoin. You can’t deposit, exchange with, or withdraw fiat on BitMEX. In spite of the fact that BitMEX allows you to exchange altcoin and Ethereum futures contracts, the platform calculates benefits and misfortunes on each product it offers in Bitcoin.
User Experience and Risk Management
With Kraken’s new acquisition of crypto facilities, it is now offering the flexibility to trade Bitcoin across futures and margin trading with leverage rates from 2x to 5x. However, Kraken generally serves users considering doing simple trades or getting some new tokens. Kraken offers an enormous selection of coins. The trading platform likewise has moved further to enhance their UI/UX with acquisitions like Cryptowatch.
On the other hand, BitMEX exchange targets experienced traders by offering its clients futures contracts with up to 100x leverage. For a trader who is new to the crypto market going for this kind of high leverage trades involve high risk and can lead to BitMEX liquidation,
However, BitMEX suggests that new clients start by rehearsing on the BitMEX Testnet before trading genuine assets. Yet, for experienced traders, BitMEX offers a tried and tested arrangement of tools for longing or shorting crypto.
If you are confused in deciding between choosing Kraken vs BitMEX exchange, know that the two exchanges offer two different experiences. For simple trading with a variety of crypto assets, you can choose Kraken. However, if you feel like that you can achieve more and want to try futures and leverage trading, then BitMEX is a more compatible option for you. You should always opt for an exchange that is according to your requirements and suits you the most.