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.

Only email, password and country of residence was required to sign up.

It should be noted that Bitmex also asks for your first name and last name. However, you can just leave the fields blank.

Signing up on Bitmex. You can leave your name blank, if you want.

Signing up on Mushino. You will need to specify a nickname.

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 basically opposites. Bitmex has an advanced interface with lots and lots of buttons — while Mushino’s interface is very simple and has very few buttons.

This also means that there a few things Bitmex can do that Mushino cannot do. One is the ability to place a trailing stop. Only Bitmex offers that functionality. On Mushino you have regular stops and take profits but no trailing stop.

Bitmex will also allow you to drag the various elements on the screen, and move them around. This is one thing I really like about the Bitmex UI — it’s really customizable and easy to personalize.

Aesthetically speaking, I don’t have many good things to say about Bitmex’s UI. It looks like it was made in the 90’s. Not a fan of the color choices either — the gray look is quite boring and dull.

Mushino has a much more modern looking UI. It’s also a bit more clean, with less buttons and less text.

The Bitmex UI is very easy to customize.

The Mushino UI has a cleaner and more modern feel.

Both platforms integrate Tradingview for their charts. Because of that, I didn’t find much difference between their charts — Bitmex’s is a lot smaller, but can be made bigger, if you like.

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.

One thing I found nice about Mushino is the small position overview they have in the bottom right of the interface. It shows you the essentials of your position — your size, your P&L, your liquidation price, your margin. At the bottom there’s also a button you can use to close your position.

Both platforms support both light and dark themes.

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)

Altcoins Basket Perpetual Future, settled in Bitcoin (BTC/ALTS)

Altcoins Basket Perpetual Future, settled in USDT (USDT/ALTS)

Shitcoins Basket Perpetual Future, settled in Bitcoin (BTC/SHIT)

Shitcoins Basket Perpetual Future, settled in USDT (USDT/SHIT)

The Altcoins on Mushino is a coin basket consisting of the following coins: ETH, XRP, BCH, LTC, ADA, XLM, XMR, XTZ, EOS and ATOM.

The Shitcoins basket on Mushino consists of: BAT, ETC, QTUM, ZEC, OMG, ZRX, REP, GNT, MANA, CVC, LOOM.

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.

If you wanna go long or short on an individual altcoin that is not Etheruem (such as XRP or BCH), Bitmex is where you should go.

If you wanna diversify your holdings, and go long or short on a dozen of altcoins at once, Mushino is where you should go. Bitmex does not offer coin baskets that will let you go long or short on dozens of coins at once.

If you wanna trade low market cap coins (such as CVC, LOOM, MANA) — Mushino is the place you should go. Bitmex does not offer futures for coins that are not in the top 20 in terms of market cap.

Controversies

Unlike Mushino, Bitmex has been involved in a number of controversies.

Here’s an outline of a couple of them:

The dreaded “submission error” on Bitmex.

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.

Liquidated traders have paid more than 30,000 BTC to the Bitmex Insurance Fund.

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.

Bitmex has a calculator that you can use to calculate your profit/loss and liquidation .

Mushino also has a calculator, although it’s a bit simpler.

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).

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 the same. They also charge 0.075% on taker orders and give you a rebate of 0.025% 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 their extremely simple UI, 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. Especially when they have the same fees as Mushino.

If Mushino lowers their fees to something like 80% of Bitmex, it might make me reconsider switching. They should also look into offering some vanilla futures — limiting themselves to perpetual futures is not the wisest move in my opinion.

The market manipulation and system overloads that we currently see on Bitmex would be the only reason I’d switch to Mushino. 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 sticking with Bitmex.