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BitMEX's trading volume is declining, and even its remaining liquidity advantage is being surpassed.

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BitMEX

Compared to the past, the infrastructure of the cryptocurrency derivatives market is becoming more diverse, with investors having more and more derivative products and platforms to choose from. After experiencing a significant drop in mid-March, the once dominant veteran derivative exchange BitMEX appears to be losing its leading position.

BitMEX Losing Its Leading Position

Despite the ongoing liquidity crisis triggered by the macroeconomic turmoil, Bitcoin has recently maintained a stable upward trajectory, striving to recover to the price levels before the major drop. Apart from Bitcoin, the derivative market leader BitMEX has also been working to maintain its position in the derivatives market.

Following the sell-off in March, the 24-hour trading volume of BTC futures on the BitMEX exchange has dropped to fourth place and has not shown improvement so far. On the other hand, Binance, which was originally ranked in the middle, has surged to the top position.

April 9, 2020 (Source: Skew)

Binance's Liquidity Catching Up with BitMEX

BitMEX's unique maker-taker fee structure has made it the market's best liquidity derivative platform for a long time, a fact that remains unchanged even with the declining trading volume. However, according to Skew, a data analytics platform, Binance is gradually catching up with BitMEX in terms of liquidity. (The so-called "10 million USD bid-offer spread" refers to the spread between the bid and ask when a 10 million USD buy order is consumed upwards and a 10 million USD sell order is consumed downwards. The lower the value, the higher the liquidity)

April 9, 2020 (Source: Skew)

Following the mid-March market crash, the spread between Binance and BitMEX sharply rose to 7.95% and 4.07% respectively. As the market entered the recovery phase, these values significantly decreased, and the indicators between the two platforms also dropped. As of April 8, Binance's spread was around 0.72%, while BitMEX's spread was 0.61%.

Over the past month, BitMEX has faced significant setbacks, from massive margin liquidations to system downtime due to a reported DDOS attack. Meanwhile, Binance has attracted market makers to provide liquidity on the exchange through the "Futures Market Maker Program," successfully increasing the exchange's size and influence in the derivatives market.

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