BitMEX Liquidations Soar to $3.1 bln, but Insurance Fund Sees Lowest Rise in March


bitmex

BitMEX Liquidations Soar to $3.1 bln, but Insurance Fund Sees Lowest Rise in March

Surprisingly, the insurance fund of BitMEX has seen slower growth in March – about 100 BTC, than it did in the previous months. The increase in February, January, and December was 1250 BTC, 459 BTC and 484 BTC respectively.

BitMEX was severely criticized during the drop of 12-13th March, which caused the exchange to shut down for about 30 minutes. The exchange defended itself by pointing out that the insurance funds are assigned only to avoid Auto-Deleveraging for profitable traders, not for reimbursing losses.

bitmex insurance fund snap
BitMEX Insurance Fund Details

Notice how the insurance fund fluctuated on the 12th and 13th March. It dropped drastically on 12th and increased by higher proportions the following day. Moreover, it witnessed a gradual decline after that as the volatility in prices remained high. Suggesting that volatility and liquidations are not always profitable for the exchange.

According to datamish, about $2.6 billion in longs and $571 million in shorts have been liquidated in the last 30 days.

bitmex insurance fund
BitMEX Explains How the Insurance Fund is Built or Depleted

Nevertheless, questions still remain around the scale of the insurance funds which is quite large. Even during such catastrophic drops, the fund has managed to increase, even if slightly.

Liquidity is King

After another incident that prompted criticism of BitMEX last month was during the market slippage on XRP contracts. At the time, BitMEX explained that these are unavoidable situations, and are characteristic of such markets.

While some took the opportunity to market their price engine compared to BitMEX, there is sufficient evidence of slippage on other exchanges as well. Crypto trader XC tweeted,

Show me some data on slippages please. We all know bitmex is more liquid. I’ve seen complaints of 50-100$ slips on Bybit telegram and in cartel. It’s easy to claim less slippage with both data to back it up means nothing.

monthly volume on exchanges
Monthly Volume on Crypto Derivative Exchange (Source: CryptoCompare)

Liquidity and position sizes are one of the leading assets for any exchange. Due to the high leverage and extreme volatility, blood in the markets are inevitable.

Currently, Okex, BitMEX, Binance and Huobi are leading the margin trading space in crypto markets. The monthly trading volume from crypto-compare reports that Okex and Huobi are leading the derivatives space currently.

Which exchange do you think is the best for crypto margin trading? Please share your views with us. 

Author: Nivesh Rustgi
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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Nivesh Rustgi 1180 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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