Since 2018, the cryptocurrency trading landscape has undergone a transformation from a collection of spot markets (fiat for cryptocurrency) to a hybrid ecosystem containing complex and popular derivatives products. In this paper we explore this new paradigm through a deep-dive of BitMEX, one of the first and most successful derivatives platforms for leveraged cryptocurrency trading, which trades on average over 3 billion dollars worth of volume per day, and allows users to go long or short Bitcoin with up to 100x leverage. To understand the complete picture of cryptocurrency derivatives, we analyzed the evolution of BitMEX’s products which consists of both settled and perpetual offerings that have become the standard across other cryptocurrency derivatives platforms. We additionally utilized on-chain forensics, public liquidation events, and a site-wide chat room to reveal that BitMEX is inhabited by a diverse ensemble of amateur and professional traders. These traders range from wealthy agents running automated strategies to individuals that trade small and risky positions and are focused on very short time-frames. Finally, we used our study of BitMEX and cryptocurrency derivatives to understand the impact that they have had on cryptocurrency asset prices in the past. In particular, we discuss the role that derivatives have served in several dramatic price movements which influenced not only the derivatives market but also the underlying spot markets.

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