Bitmex vs Mushino — Which One Is Better For Futures Trading?
Which platform is better? Manipulative Bitmex or low liquidity, low volume Mushino?
The full review of the king of cryptocurrency futures trading, Bitmex, and one of it’s top competitors, Mushino, is here.
BITMEX VS MUSHINO
When Bitmex launched in 2014, it was one of the first platforms to offer Bitcoin futures. The liquidity was extremely low for the first couple of years, but eventually picked up steam around 2016. Today it is the most liquid of all cryptocurrency futures platforms.
Recently, though, it’s had its fair share of controversies. Users have been complaining about their system overloads and how they might be using them to liquidate their own traders. That’s when platforms like Mushino started popping up.
Mushino appears to be one of the leaders of the Bitmex opposition.
Mushino claims to solve all of the problems that people have with Bitmex and also provide a trustworthy and secure, high leverage cryptocurrency futures platform.
I decided to not trust either of their claims and do my own research instead.
I spent a few solid evenings on signing up on each platform, depositing a small amount of funds, opening a few positions — basically everything a new trader would do. I will now tell you everything that I learned — so that you can make your own decision on whether Mushino is better than Bitmex or not.
Opening an account — Bitmex vs Mushino
Opening an account was pretty easy on both of them.
Neither of them required any form of KYC when signing up.
Only email, password and country of residence was required to sign up.
Note: As of August 2020, Bitmex has initiated a new KYC program. The program will require all users to complete KYC before January 2021.
Depositing funds
Both platforms support Bitcoin deposits.
Mushino also supports deposits in ETH and USDT. I’m personally not a fan of either, so I didn’t really care. I’m okay with just having deposits in Bitcoin.
Both platforms claim to utilize multisignature cold storage for 100 percent of user funds— the industry standard among crypto exchanges.
Whether this is true, we cannot verify. As far as I’m aware, there is no way to tell whether an address is “cold” or not. We can only take their word for it.
The fact that neither platform has ever been hacked, did give me some comfort though — this fact is especially impressive for Bitmex, given that they have been in business since 2015.
Both platforms claim to be 100% solvent. Not only that, but they also claim that the entire platform will be shut down, should they ever become the slightest degree insolvent. Again, very hard to verify for us to verify whether this is true or not.
Opening a position
Mushino gave me free 0.00021 BTC for signing up, which meant that I could open a position right away and didn’t have to wait for my deposit to complete.
It allowed me to open a very small position ($25, at 10x leverage) and play around a bit before having my deposit credited. Not a huge deal, but a pretty cool gesture overall.
The trading interfaces on the two platforms are quite similar, albeit with a few differences.
The Bitmex UI has the following components: Order book, chart, trades, positions, depth chart, contract info.
Mushino has all of the above, plus:
Indicator widgets (for technical indicators such as MACD and RSI), trading signals and market events.
This makes Mushino great if you do any kind of technical analysis, or if you require market signals.
If you don’t care about technical analysis, and don’t want trading signals, the Bitmex UI probably makes more sense, since you can have a depth chart and Tradingview chart in the same view (not possible on Mushino without seriously cramping up the UI).
Both UI’s are customizable. You can drag and drop elements around the screen, and resize them to your liking.
Mushino’s UI also comes with three different UI “modes” (versions of the UI) that each can be customized. I guess this makes sense if you want to switch quickly between, let’s say, scalping and technical analysis.
Bitmex has a light mode and a dark mode. Mushino only suppors dark mode for now. However, Mushino allows you to change the color scheme of the UI (not possible on Bitmex).
Both platforms integrate Tradingview for their charts. Bitmex does not support a multi-chart setup out of the box. If you want multiple charts, you will need to have multiple windows open. Mushino has support for up to 2 Tradingview charts in the same screen. Both platforms support full screen mode.
Both platforms also have a leverage slider — an essential component, when you’re using isolated margin. Mushino supports up to 150x leverage, while Bitmex supports up to 100x.
In addition to their default mode, Mushino also has a technical analysis mode:
Contracts available
The selection of production may or may not be important to you. Personally I only trade the BTC perpetual, so that’s all I need. But perhaps you are into altcoins, in which case you should definitely consider this.
Bitmex offers the following contracts:
- Bitcoin Perpetual Swap/Future (XBTUSD)
- Bitcoin Vanilla Futures (expiries: Mar 27 2020, Jun 26 2020)
- Cardano, Litecoin, Bitcoin Cash, Tron, Ripple, EOS and Ethereum vanilla futures (expiry: Mar 27 2020).
- Ethereum and Ripple Perpetual Swap/Futures
Mushino offers:
- Bitcoin Perpetual Future (BTC-PERP)
- Ethereum Perpetual Future (ETH-PERP)
Verdict
If you’re just looking to go long or short on BTC or ETH, either is good. They both have perpetual futures that you can use for that.
If you want to trade vanilla futures, Bitmex is where you should be at. Mushino doesn’t offer vanilla futures at the time of writing this.
Controversies
Unlike Mushino, Bitmex has been involved in a number of controversies.
Here’s an outline of a couple of them:
System overload
This one is perhaps the biggest controversy of them all. Due to the design of the Bitmex trading engine, it will sometimes become impossible to submit an order. Orders that are being submitted will be rejected with a system error.
The result is always the same. A bunch of traders on the platform get liquidated.
Interestingly though, while the system is rejecting the majority of the orders, certain orders will still go through. There has been rumors that these orders are being submitted by Bitmex’s internal market making desk (run by a personal friend of the Bitmex CEO, ex-banker Nick Adrianov). Bitmex will then use these orders to manipulate the market and trigger a series of stop losses (also known as “stop hunting”). Once the stop losses get triggered, the price will rise or drop massively, leading to a cascade of liquidations.
Because of how liquidations work on Bitmex, Bitmex has a big incentive to liquidate their traders. When a trader gets liquidated on Bitmex, all of his remaining equity is transferred to the Bitmex Insurance Fund.
The Bitmex Insurance Fund has more than 30,000 BTC in it ($300M at todays prices) and is directly controlled by Bitmex. They even include it on their balance sheet. Critics claim, that due to how the Insurance Fund works, Bitmex has a perverse incentive to liquidate their traders and make their insurance fund as big as possible, maximizing the satisfaction of their shareholders and investors.
Stops not being triggered
This one is not a huge controversy (large scale software systems are never without bugs) but it has led to a fair amount of uproar throughout the last couple of years. One would think that with $1 billion dollars of volume a day, Bitmex would be able to hire enough engineers to fix the issue.
Stops are particularly important on Bitmex because you lose all of your position equity when liquidated. I would not recommend anyone to trade on Bitmex without adequate stops in place — the risks of losing everything are too high.
Personally, I have only faced this issue once — and it didn’t cost me any money, because I managed to close the position manually instead. But it’s definitely something to be aware of, if you have a large position, or if you’re not at the screen all day like me.
Mushino uses a different way of liquidating positions, where the position is liquidated in steps and you don’t automatically lose all of your equity when liquidated. Since I don’t really play with high leverage (usually I will do 2x and that’s it), I don’t care much about this (getting liquidated on 2x leverage is a serious feat), but if you’re using 4x or more, it may be something that you wanna look into.
Advanced order options
Both platforms will offer you some advanced options that you can use for your orders, such as Post Only, Reduce Only and Hidden flags.
The Post Only flag is perhaps the most useful of these, as it will ensure that you never pay any fees. All orders with the Post Only flag are guaranteed to be filled passively in the market, giving you a rebate of 2.5 basis points on every trade. The caveat is that it may take some time for your order to get filled — if you’re impatient, this flag is not for you.
Another useful flag is Reduce Only. This flag will ensure that your order can only reduce the size of your position. I like to use this when I’m closing my long position — it guarantees that I won’t accidentally end up with a short due to having too many contracts filled in the market.
For the remaining order flags, there is a bit of variation between the two.
Mushino supports the Iceberg and OCO flags — Bitmex does not currently offer these. OCO used to be supported through the Bitmex API but was removed when they recently “simplified” their matching engine. It is likely that it will be supported again in a future version of their API.
Bitmex, on the other hand, supports trailing stops. These are not currently available on Mushino. When I contacted Mushino about it, they told me that these were on the priority list and would be implemented soon. We will have to see about that.
Both platforms support stop orders and take profit orders.
Managing your position
So this one is kinda important to me. Most of the time you’re not actually trading — you’re just “managing” your position.
For me, “managing” a position, usually refers to me sitting in front of a screen all day, watching the profit go up or down, and setting stops.
I may adjust my leverage if I’m feeling adventurous. But I’m on 2X, so I don’t do this often.
What I do like to have is some way of monitoring my profits. 99% of the time I can tell when my profits go up or down just by looking at the charts. But due to various aspects of futures trading, such as funding and fees, the Bitcoin Tradingview chart is not always perfectly correlated with my profits. Fees and funding will either add or subtract from your profits. The difference they make can be substantial over the long run (indeed, I have often found myself with much less profit than the chart would indicate).
This is the reason I really like what Mushino is doing with their profit charts. On Mushino, you don’t just get a Tradingview chart for Bitcoin. You also get a nice little profit chart that will visualize your profits over time. When hovering over the chart, you’ll be able to see exactly what caused a spike or drop in your profits. There’s also a column diagram that will let you visualize your daily, weekly and monthly profits.
I feel like this is something Bitmex could easily implement as well. Right now, on Bitmex, you only get a boring transaction log of all the changes to your P&L. In order to make any sense of the numbers, you’ll need to manually plug the numbers into excel and create a chart for them yourself. Not a huge fan of that. Right now, Mushino is superior on this aspect.
Liquidation
We’ve kinda covered this already, but I’ll cover it again just for good measure.
Bitmex has a really brutal liquidation system — you’ll automatically lose all of the equity on your position if you ever get liquidated. There’s no saving grace — all you can do is one of the following:
- Deposit more money, and open a new position
- Abandon your account and start a new one, to get a “fresh start”
A friend of mine gets liquidated a lot. He always chooses the second option. Because of that, he has now churned through a hilarious amount of Bitmex accounts.
Mushino is a little bit different. Mushino employs a technique that they call “incremental, real-time liquidation”. With this technique, you won’t actually lose your equity when liquidated. Instead, your position will enter read-only mode, where it’s no longer possible to submit or cancel orders. The Mushino engine will then take over your position, and try to sell off 10% of it in the market.
If the order is filled, the position will usually exit liquidation again. This is possible because the maintenance margin requirements are now satisfied. When the position is reduced by 10% in size, the maintenance margin requirements also become 10% lower. Since your deposited margin is the same, your position will have enough margin in it to exit liquidation.
The net result is that you get to keep your position (unlike on Bitmex) and that you get to keep your maintenance margin (unlike on Bitmex). You may take a small loss from selling off 10% of the position in the market, but it will be negligible compared to what you would lose on Bitmex (there you would simply lose your entire maintenance margin).
Liquidation is rarely an issue for me personally (because I use a very low leverage) but if you’re using anywhere above 4x leverage and you’re trading on Bitmex, you should definitely make sure to set appropriate stops (and pray to god that they don’t fail to get triggered).
Automated Trading
Mushino supports automated trading out of the box, through their TA strategies. You can create a strategy that goes long when the MACD rises above 0, for instance. The strategies are run directly on Mushino’s servers and can be created directly from their trading interface, using their indicator widgets.
For automated trading on Bitmex, you will need to code a custom bot. If you are a skilled engineer, there are plenty of repositories on Github that should get you started. If not, you will need to find someone who can code it for you.
Both platforms offer REST and websocket API’s. Neither of them offer FIX, at this point.
Fees
Like many other derivatives platforms, Bitmex charge 0.075% on taker orders, and give you a rebate of 0.025% on maker orders.
Mushino’s fees are a little bit more taker-friendly and a little less maker-friendly. They charge 0.050% on taker orders and 0.000% on maker orders.
Neither platform has fees on deposits. Withdrawals carry a network fee, which is dependent on blockchain conditions.
Withdrawals
Bitmex and Mushino both process withdrawals once per day.
The reason for this is that they keep 100% of funds in cold storage.
Bitmex withdrawals are processed every day at 13:00 UTC.
Mushino processes withdrawals at 8:00 am PST.
Jurisdiction
Both platforms are based in the Seychelles — if you want to sue them for any reason, your options are probably limited.
Their choice of jurisdiction is not surprising, however, given that the Seychelles is now number 4 on the list of countries by cryptocurrency trading volume. A large amount of exchanges have set up shop there, to enjoy the lax regulatory environment and the non-existing taxes.
The final verdict
If you’re at all like me, you may want to see some hard data before making a decision.
For that purpose, I have made a table for you that compares Mushino and Bitmex on a number of different important features.
This is not a complete table, but it will serve as a starting point for you, when making a decision.
My conclusion:
Bitmex is still my preferred option, but I ‘m happy that we now have an alternative in Mushino. The things that would speak in favor of Mushino is the tools that they have in place for technical analysis (signals, automated trading based on indicators, indicator widgets), and the fact that they haven’t been involved in any scandals. The biggest reason against Mushino is the fact that their liquidity is low. Mushino still has a long way to go in terms of liquidity. While they provide some significant improvements over Bitmex, they will need some more liquidity in order to make their platform attractive for all traders.
A side by side comparison of Mushino and Bitmex:
Conclusion
Bitmex is still the king of liquidity and volume. For this reason, it’s just too hard to give up on them. However, it’s nice to have an alternative whenever I want to trade based on technical analysis. The automated trading offered by Mushino is also nice.
If Mushino improves their liquidity in the future, it might make me consider switching for good. On the liquidity side of things, Mushino is not even in the same league as Bitmex. I hope they improve their liquidity in the future, because having a valid alternative to Bitmex would be really good for crypto in general.
For now, I am trading on Bitmex when I require stellar liquidity, and on Mushino when I run technical analysis-based trading strategies.
