Phemex is the latest Bitcoin derivatives exchange on the block. This Phemex review will determine if this exchange is worth trading on.
Phemex seeks to provide institutional-level derivatives trading to traders en masse. The ex-Wall Street team is looking to bring their trading experience into action by expanding the pool of crypto derivative broker options for traders and investors alike.
The ex-Morgan Stanley executives launched their product on the 25th Nov. 2019 in Singapore, and have since been attempting to focus on a more user-centric approach for the derivatives trading platform.
To their credit, the exchange recently added the LINK/USD trading pair after receiving community feedback on new trading pairs to add to their exchange.
Phemex does not charge fees on deposits, meaning you can move money into the exchange at no cost. When it comes to trading fees, however, Phemex keeps it simple at 0.025% and 0.075% maker and taker fee respectively. These rates are similar to other exchanges in the industry.
Beyond this, Phemex also has a funding rate that depends on the leveraged position. As can be expected, a high leveraged position will have a significant impact on equity. This is reflected in the rate.
Presently, Phemex charges a flat 0.0005 BTC for every bitcoin withdrawal, which could of course change in the near future. Below is a fee info table in relation to specific trading pairs.
Deposit and withdrawal methods
Phemex wallets allow deposits and withdrawals with both bitcoin and credit cards. However, no option could be found on how to directly deposit USD on the platform at the time of writing this Phemex review.
Before using Phemex you have to buy Bitcoin. Users can either do it on Phemex once registered or they can deposit BTC into their BTC wallet and work their way into the market from there. In order to trade Bitcoin settled contracts, users then need to fund their Bitcoin trading accounts from a wallet with pre-deposited funds. Similarly, to trade USD settled contracts, users can exchange BTC from a wallet to their USD trading account at a real-time rate.
On the flip-side, withdrawing is simple. All a user has to do is enter their wallet address, the amount of bitcoin to be withdrawn and continue the process via standard 2FA features. Unfortunately, there appears to be no Bitcoin address white-listing function as with other exchanges like Coinbase. This could be seen as a security drawback.
Phemex is a relatively new cryptocurrency exchange that focuses on cryptocurrency derivatives. Phemex offers Bitcoin, Ethereum, Ripple, and LINK trading against the US Dollar (USD).
Buying and selling on Phemex
Since it is a derivatives platform, there is no actual transfer of BTC between buyers and sellers. Instead, contracts are settled in the underlying asset and quoted in USD.
Similar to other exchanges, Phemex accommodates three types of orders: ‘Market’, ‘Limit’ and ‘Conditional’ trading. A trader can choose from these options to open or close a position. Traders can also choose the amount of leverage they want to use. To execute an order, traders can choose from another three options, namely, ‘FillOrKill’, ‘ImmediateOrCancel’ and ‘GoodTillCancelled’. You can learn more about the types of orders here. If you are new to trading, make sure to read our guide on how to trade Bitcoin.
Leverage trading On Phemex
At the time of writing this Phemex review, Phemex offers 5 different trading pairs. Here they are: BTC/USD, ETH/USD, XRP/USD and LINK/USD, and most recently XTZ/USD. The platform allows up to 100x leverage for its futures trades. This means that a price swing of 10% could result in a 1,000% appreciation or depreciation of any deployed capital.
Essentially, this allows traders to multiply their exposure to price volatility. Presently, Phemex offers perpetual contracts. This is the exact same as BitMEX and Bybit. These contracts have no set expiry date at which they would automatically be settled.
What does 100x leverage trading mean on the platform?
After the 2017 boom and bust cycle, many traders and investors became attracted to the idea of using margin/leverage to trade cryptocurrency instruments. Since then, many exchanges have launched to cater for this growing market need, and Phemex is no exception.
As previously stated, the platform allows 100x margin/leverage on any trade. Simply put, this means that a trader is borrowing money from an exchange in order to buy a financial instrument (Bitcoin). In effect, it is a loan from the exchange that is used to buy more Bitcoin contracts than one would otherwise be able to.
Note to US investors:
Regrettably, US traders are barred from the platform. As per their terms of service, traders located in United States of America or Québec (Canada), Singapore, Cuba, Crimea, Sevastopol, Iran, Syria, North Korea, Sudan (or other restricted jurisdictions), are prohibited from trading on the platform.
As such, users from banned countries would have to use workaround solutions in order to access the platform. Most traders in restricted areas use a VPN to access the platform. The most popular one among Bitcoin traders is NordVPN.
Is there mobile and desktop support?
Phemex has integrated both desktop and mobile useability. Also, Phemex has developed applications for both android and IOS with full functionality.
Charts & TradingView
From a user point of view, Phemex has implemented a modular design. This allows traders to customize the platform to their own preferences. The vanilla version features the order book, a TradingView-powered chart, live positions, the order menu, contract details, recent trades, an order book depth chart as well as a trading account display showing crypto and USD balance details.
The trading view chart features several time-frames. From these, a trader can gauge the market, including the 1 minute, 5 minutes, 15, minute, 30, minute, 1 hour, 4-hour, daily, weekly, monthly, 3-monthly and yearly chart. While this is a good start, traders are unable to utilize custom time frames on Phemex. Essential trading view tools are also available on the platform. Traders can choose from all the available indicators on the platform. There are no limits on the number of indicators per chart.
One cool feature low-time-frame-traders would surely appreciate it the ping displayed at the top right corner of the screen, which indicates the lag time between a user and Phemex servers. Aside from that, the trading experience seems mostly similar to other high-end derivatives exchanges.
Is Phemex safe?
While conducting this review, it was great to find out that the CEO and founders aren’t hiding their faces, unlike with other some exchanges. In fact, they can be found either on the main site or on LinkedIn, where employee details are fully available. The public nature of their profiles is, of course, a healthy sign.
Is Phemex a secure trading platform?
From a security point of view, Phemex boasts a hierarchical Deterministic Cold Wallet System which assigns separate cold wallet deposit addresses to each user. All the deposits are periodically gathered to the company’s multi-signature cold wallet via offline signature. The platform processes withdrawal requests three times per day, which might explain relatively long withdrawal wait times.
The platform uses Amazon Web Service (AWS) Cloud in order to secure its servers, which is a leading industry standard and bolsters security and safety expectations. On top of that, Phemex also deploys firewalls to separate trading zones within its internal network.
From a more technical standpoint, the trading platform is comprised of two core components: the CrossEngine and TradingEngine, in which it matches client orders based on price and time priority.
The developers have also said that traders should expect to experience virtually zero downtime. In fact, Phemex claims that users will not notice any abrupt system maintenance periods. This is due to its recovery system that gives users 99.99% high availability. If this stands the test of time, this would, of course, be considered crucial for exchanges that are open 24/7. That said, since Phemex is a relatively recent derivatives platform, only time will tell how it will handle malicious attacks when they inevitably come to pass.
Competitors – Bybit & BitMEX
- BitMEX is the Bitcoin trading exchange with the most liquidity. BitMEX has been around since 2014 and has never been hacked. However, traders are leaving BitMEX because of some recent problems. For example, in highly volatile moments, the BitMEX order engine gets overloaded. This means that traders can’t submit their orders. This is the main reason why traders are leaving to Phemex & Bybit.
- Bybit is the most popular exchange in crypto. It has high liquidity and excellent customer service. Bybit has been around since 2018 and has never been hacked and has never had a system overload. Make sure to read our full Bybit review or our complete Bybit tutorial.
What sort of customer support does Phemex provide?
As with most exchanges, Phemex has a direct line of customer support as well as an FAQ bundled up with its help center. The platform also leaves the line open for users to contact the CEO directly on telegram, which is a nice touch.
Unfortunately, though, the company does not offer any direct telephone support. They handle most of its more technical issues through its dedicated e-mail support. If you want an exchange with perfect customer support, try Bybit. The platform has a presence on most social media platforms. That includes Twitter, Reddit, Facebook, and Telegram, however, email seems the preferred ticketing method.
Again, since Phemex is a very recent exchange, there are practically no reviews available at this stage. However, based on personal prior interactions with the exchange, I can say that support is quick, informative and helpful. It remains to be seen whether this improves as the company grows – though I’m confident that it will.
Phemex’s main specializations are two-fold: the fact that you can create sub-accounts within an existing account, and their user-oriented approach – which isn’t guaranteed in the future as the company scales. These features might help it to gain a competitive advantage over other exchanges such as Bitmex & Bybit in the future.
With some work, Phemex has the potential of taking the derivatives market to the next level. However, given the increasing competition in derivatives trading, this might be an uphill struggle for the platform. Phemex is a great competitor to Bybit, but Bybit still has the best customer service in crypto.
Needless to say, I encourage you to do your own research beforehand, but at the onset, it appears to be an attractive exchange that ticks most of a trader’s boxes.