With the development in technology being its main focus, the crypto and digital asset ecosystem have been evolving constantly over the years, The CEO of BitMEX, Arthur Hayes joined Luke Martin, an analyst to converse about developments in the cryptocurrency-domain and the future of BitMEX crypto exchange. In the interview, Hayes answered the much-asked question regarding the addition of another virtual currency to BitMEX.
It is to be noted that BitMEX is quite popular among Asian traders and there are plentiful new coins coming out. Notably, Luke quizzed Arthur about adding more coins to BitMEX instead of the current list that has only 4 cryptocurrencies- Bitcoin Cash, Bitcoin, XRP, and Litecoin. Hayes further informed that they would not be adding any virtual currency. He gave the reason behind his statement that the derivatives required adequate liquidity in the spot market.
Hayes mentioned that in his opinion, the futures market should forever be tighter and trade bigger than the underlying of this derivative. As per him, that only takes place if one has adequate liquidity in the spot market.
Interestingly, Hayes explained that if BitMEX listed an arbitrary token from CoinMarketCap, the market makers would be incapable to hedge the associated risks. Notably, Binance has an extensive list of virtual currencies where the market makers want to price a derivative, in such a case, it will spread too wide. According to Hayes, such a scenario is terrible for clients. He elaborated that from a client’s point of view, he is treating a leveraged product that has a wider spread, then the underlying on the spot market. He added that he is just increasing his risk of getting liquidated. And that’s something that they don’t want to do.
On the other hand, when BitMEX would include a new product, the market makers would be able to make ‘good type prices’ for their clients. Besides, Hayes informed that BitMEX would in no way have as many cryptocurrencies as Binance because of the same reason.