Cryptocurrency

Why Bitmex Contracts are Inverted?

Investing in Bitcoin is considerably newer compared to investing in stocks or the Forex market. Whether you’re an experienced trader or a newbie, you need to take a look at the changes that occur in investing platforms. When trading on Bitmex, you surely know about the Bitcoin futures market.

It used to work as treating Bitcoin as a commodity itself. For example, a contract would be 1 Bitcoin band would settle in USD or the currency of your choice but mostly USD. This would mean the traded pair would be BTC/USD. Instead of this, think of swapping BTC and USD places in certain contracts. This would make you treat USD as a regular commodity and settle profit and loss in BTC. So imagine replacing the BTC and USD in this case.

What this does is it allows you to buy less than one Bitcoin. Let’s say your contract could represent $4,000 and this amount would be quoted in BTC. At the time of this writing—$4,000 would be 0.41 BTC. This gives room for those who don’t have enough money to invest in traditional contracts. Given 1 BTC is almost $10,000 at the moment, investing in Bitcoin is becoming less of an option to many. With that said, inverted contracts allow more people to invest in Bitcoin contracts.

Benefits of Inverted Market

Since you would need to invest at least $10,000 in order to get a Bitmex contract, not only it would be costly, but the number of contracts you can get would be limited. When you think about it, with an inverted contract, you have more freedom overall.

Although the calculation of the profit is a little bit different given the tables are turned, inverted Bitmex contracts make investing in Bitcoin available to more people. With that said, it isn’t a matter of making more profit but making investing in Bitcoin through Bitmex contracts more available.

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