PrimeBit is a new crypto derivatives exchange that is simple to use and accessible to almost everyone. The exchange is still in its early stages. It provides its clients with fascinating crypto trading tools. It also provides a peer-to-peer trading platform that offers easy leveraged trading at cheap rates.
PrimeBit, unlike many crypto exchanges that provide crypto futures, does not serve as the counterparty. Instead, it provides a platform for traders to join on a peer-to-peer basis, with up to 200x leverage. It is similarly simple to join and has no minimum deposit.
Are you curious about how PrimeBit works? Or why peer-to-peer trading may be a better alternative for some investors? Consider what PrimeBit is doing to provide crypto traders with new options for leveraged crypto trading.
PrimeBit: Peer-to-Peer Crypto Derivatives
A crypto derivatives broker provides a service similar to that of an exchange such as BitMEX. Instead of actual trading tokens, PrimeBit clients may exchange contracts backed by Bitcoin, Ethereum, and Litecoin. Opening an account with PrimeBit is straightforward.
All you need is an email address to create an account. Once activated, you may deposit Bitcoin into your PrimeBit wallet and begin trading on the exchange. It also provides a fully-functional demo account, ideal for traders to experiment with before using Bitcoin.
At the time of writing, PrimeBit provides three contracts:
- BTC/USD
- ETH/USD
- LTC/USD
PrimeBit is still in its early stages as a crypto derivatives exchange. The number of contracts it will provide its clients will rise as the firm expands. For the time being, PrimeBit has three agreements that cover three of the most popular tokens.
Why is Peer-to-Peer used?
Trading on a peer-to-peer basis provides benefits over trading on an exchange. It serves as both the counterparty and the market maker. PrimeBit acts as both a counterparty and a market maker. There is a danger that the exchange will take advantage of the price-setting process. There are various charges against CFD brokerages for using their price-setting skills to profit from customer positions in CFD trading.
When your broker is not the counterparty, this deception is not conceivable because the broker earns money purely by facilitating transactions and does not profit if you lose. With PrimeBit, another trader generates your gains or losses, while PrimeBit makes money by constructing the trading structure.
This platform is especially beneficial for traders who wish to employ crypto derivatives to generate money from their Bitcoin holdings. PrimeBit platform traders get paid (or are required to pay) funding fees directly every eight hours.
How PrimeBit Works
PrimeBit’s trading platform, the industry standard MT5 trading terminal, is accessible via its internet interface. After you’ve opened and funded an account with PrimeBit, you may start making transactions using the web platform. PrimeBit exclusively takes BTC deposits, and both deposits and withdrawals should be quick. According to the corporation, they will reimburse deposits once one Bitcoin node validates the transfer.
PrimeBit Fees and Charges
Costs for makers and takers on PrimeBit are as follows (financing fees fluctuate with the market but are locked in once a deal is open):
- BTC/USD – Maker Fee -0.025% – Taker Fee 0.075%
- ETH/USD – Maker Fee -0.025% – Taker Fee 0.075%
- LTC/USD – Maker Fee -0.025% – Taker Fee 0.075%
As previously stated, PrimeBit derives its revenue from manufacturer fees and will not accept any percentage of the financing fees you must pay every eight hours. The MT5 platform includes charting tools for market analysis, and it also integrates with a variety of third-party apps.
MT5 is a robust trading platform with several essential features, such as trailing stop-loss orders. You don’t have to worry about utilizing limit orders with MT5 or dealing with a flawed new trading interface created from the ground up.
Contract
PrimeBit’s three contracts are perpetual contracts, which means they may be kept indefinitely (as long as you can pay the funding fees). PrimeBit eliminates temporal value from the pricing equation by employing a perpetual contract, making it considerably easier for the contracts to follow the price of the underlying tokens directly.
The contracts are priced in US dollars but settled in Bitcoin. When the price of the crypto asset changes by $1 USD, the contract’s value rises or falls by 0.1 million BTC (equal to 0.0001 BTC). The contract price is set, as are the finance fees.
The contract financing costs work on a premium/discount index, which traders may access at any time. The real prices used to calculate the contract value are obtained from various reputable exchanges and do not PrimeBit or the price action of a particular exchange. PrimeBit has done an excellent job of developing a pricing mechanism that addresses many of the challenges that crypto dealers confront.
Are Derivatives Suitable for You?
PrimeBit is a peer-to-peer exchange. However, to utilize leverage, you must deposit Bitcoin with the exchange. Trading derivatives is an excellent method to leverage your tokens and obtain greater exposure to an asset, but it is not suitable for all traders.
Before you begin trading crypto derivatives or any other derivative product, you must understand how leverage might affect your deal. The more leverage you incorporate into a transaction, the more you stand to make or lose, depending on market direction.
When using leverage, it is critical to place stop-loss orders since you will have to liquidate holdings that go against you. Losses are unavoidable when trading with leverage, and you should evaluate how this may affect you financially and psychologically before entering the market.
PrimeBit provides a fully functional demo account, a fantastic opportunity to learn how leverage works in real-world settings. The demo account is free, and if you’ve never utilized leveraged products before, it’s a smart idea to trade for a week or two without risking actual Bitcoin.
PrimeBit Review: Final Verdict
PrimeBit is introducing some innovative concepts to the crypto derivatives market. The peer-to-peer structure of its exchange addresses the potential for issues when a broker acts as both a counterparty and a market maker. PrimeBit has also developed a solid price-setting mechanism that would be very hard to ‘game’ to affect pricing on its exchange.
It is also effortless to use, allowing anyone with enough BTC in their wallet to trade leveraged crypto derivatives. PrimeBit only accepts BTC for deposits, and withdrawals may be detrimental to specific traders, but BTC is not difficult to get these days.
Overall, PrimeBit is a fantastic broker to consider if you want to trade BTC, ETH, or LTC on a leveraged basis, and it will likely extend its operations as more clients sign up. The only major disadvantage of PrimeBit is its inexperience since it will need to develop a track record of providing reliable service to its clients.