Crypto Events Betting! BitMEX Launches Prediction Market, FTX, BTC ETF, SBF All in the Game

The U.S. exchange BitMEX has launched a new derivative product called Prediction Markets, allowing investors to hedge or place bets based on trending events in the cryptocurrency industry. The initial products offered include the FTX customer claims recovery rate, the probability of approval for a Bitcoin spot ETF, and the likelihood of SBF going to jail.

How Does Prediction Markets Work?

The operation of prediction markets is similar to all futures contracts on BitMEX, but with the following differences:

• No leverage is provided
• Margin and settlement are in USDT
• Payments will be based on finite prices ranging from 0 to 100
• Maker fee is set at 0.00%, Taker fee is set at 0.25%
• If the outcome or event occurs before the contract expiration date, it will be settled early
• The value of each contract ranges from 0 to 1 USD, but quoted in percentage terms

Products Currently Launched

BitMEX has initially launched three products, which are currently the most discussed events in the cryptocurrency community:

• P_FTXZ26: Prediction on the recovery rate for FTX clients
• P_XBTETFV23: Prediction on SEC approving a Bitcoin ETF, 100 for approval, 0 for rejection
• P_SBFJAILZ26: Prediction on whether SBF will be sentenced to jail, 100 for imprisonment

Example Explanation

For instance, when trading, the price of the P_FTXZ26 contract prediction on the recovery rate for FTX clients is 20. This means the market predicts a recovery amount of $0.20 for every $1. The trader decides to purchase 1,000 contracts at this price, with the contract expiring on December 25, 2026.

• If the market price of the P_FTXZ26 contract is higher than 20, the trader can sell all 1,000 contracts to realize profits
• Wait until the contract expiration date and settle the contract according to the announced recovery rate defined in the contract specifications
• Or cut losses and exit when the market price of the contract is below 20 to retrieve the margin

If the investor waits until the contract expiration date and the announced settlement price is 30, then the trader will gain

Closing Price – Original Cost * Multiplier * Contract Quantity = 30 - 20 * 0.01 * 1000 = 100 USDT

Based on the latest data available, the market anticipates a 30% recovery rate for FTX clients, a 24.5% probability of SEC approving a Bitcoin spot ETF, and an 85% probability of SBF being imprisoned, indicating a prevailing pessimistic sentiment!