Brokers

PrimeBit Review: P2P Crypto Derivatives Exchange

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PrimeBit is a new crypto derivatives exchange that is easy to use and can be accessed by just about anyone. While the exchange is new, it offers its clients some interesting crypto trading tools and a peer-to-peer trading platform that offers simple leveraged trading at low rates.

Unlike many crypto exchanges that offer crypto derivatives, PrimeBit doesn’t act as the counterparty. Instead, it creates a platform for traders to connect on a peer-to-peer basis, with leverage of up to 200x.

PrimeBit is also simple to sign up for and has no minimum deposit. If you are interested in how PrimeBit works, or why peer-to-peer trading may be a better way to trade for some investors, let’s have a look at what PrimeBit is doing to give crypto traders new options for leveraged crypto trading.

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PrimeBit Makes Peer-to-Peer Trading With Crypto Derivatives Easy

PrimeBit is a crypto derivatives broker that offers a service that could be compared to an exchange like BitMEX. Instead of trading in actual tokens, PrimeBit clients have the ability to trade contracts that derive their value from Bitcoin, Ethereum, and Litecoin.

Account opening at PrimeBit is simple. All you need is an email address, and you can set up a PrimeBit account.

Once your account it open, you will be able to deposit Bitcoin in your PrimeBit wallet, and then start trading on the exchange. PrimeBit also offers its clients a fully-featured demo account, which is great for traders who want to practice before they use their Bitcoin to back-up real trades.

The three contracts that PrimeBit offers at the time of writing are:

  • BTC/USD
  • ETH/USD
  • LTC/USD

As PrimeBit is just getting started as a crypto derivatives exchange, the number of contracts that it will offer its clients in likely to expand as it grows as a company. For now, PrimeBit has three contracts that cover three of the most popular tokens there are.

PrimeBit Features at a Glance

  • up to 200x – the highest leverage on the market
  • MetaTrader 5 desktop and web application
  • Fair Price Marking – a mechanism to enable smooth trading on volatile assets even with high leverage
  • No minimum deposits and fully-functional demo accounts for easy access for beginner traders
  • No expiry dates – trade perpetual contracts with no limits to your profits
  • Fixed point value – easy to understand price model with linear returns
  • A lucrative affiliate program with up to 20% revenue share and a transparent dashboard for controlling the revenue flow
  • PrimeBit Trade Calculator for easy computing of the basic parameters of an order you consider to make.

Why Peer-to-Peer?

Trading on a peer-to-peer basis has some advantages over using an exchange that acts as both the counterparty, and market-maker. When an exchange is both the counterparty and market-maker, the risk exists that the exchange will use the price-setting mechanism to its advantage.

In the world of Contract for Difference (CFD) trading there are numerous allegations against CFD brokerages of using their own price setting abilities to make money from client positions

When your broker isn’t the counterparty, this form of subterfuge simply isn’t possible, as the broker makes money solely from facilitating trades, and doesn’t make money if you lose. With PrimeBit, another trader will create your profits or losses, and PrimeBit will make money in the form of fees for creating the trading structure.

This kind of platform is also good for traders who want to use crypto derivatives as a way to make income from their Bitcoin holdings, as traders on the PrimeBit platform are paid (or have to pay) funding fees directly every eight hours.

How it Works: Trading with PrimeBit

The trading platform that PrimeBit created is available via its online interface and is the industry standard MT5 trading terminal. Once you open and fund an account with PrimeBit (or create a demo account), you can begin to open trades via the online platform.

MetaTrader

PrimeBit only accepts deposits in BTC, and both deposits and withdrawals should be very fast. The company says that deposits will be credited once one Bitcoin node confirms the transfer.

PrimeBit Fees

On PrimeBit the fees for makers and takers are as follows (the funding fees will change with the market, but are locked-in once a trade 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 mentioned above, PrimeBit makes its money from the maker fees, and won’t take any portion of the funding fees, which have to be paid every eight hours. The MT5 platform has charting tools that you can use to analyze the markets, and it also works with a number of third-party applications.

Trading Screen

MT5 is a solid trading platform that has loads of useful features, like trailing stop-loss orders, built-in. You don’t have to worry about using limit orders with MT5, or dealing with a buggy new trading interface that was built from scratch.

PrimeBit: The Contract

The three contracts that PrimeBit offers are perpetual contracts, which means that they can be held forever (as long as the funding fees can be paid). By using a perpetual contract, PrimeBit removes time value from the pricing equation and makes it much easier for the contracts to track the price of the underlying tokens directly.

The contracts are priced in USD but settled in BTC. When the price of the crypto asset changes by $1 USD, the value of the contract will rise or fall by 0.1m BTC (equal to 0.0001 BTC). The price of a contract is fixed, as are the funding fees.

The funding fees for the contracts are determined by a premium/discount index that traders can view at any time. The actual prices that are used to determine the contract value are sourced from a number of reputable exchanges, and can’t be influenced by PrimeBit, or the price action of a single exchange.

PrimeBit has done a good job of creating a pricing system that works to overcome many of the issues that crypto traders face.

MetaTrader 5 MT5

Some crypto exchanges use a proprietary trading platform, but this isn’t always the best way to go. Trading in the crypto markets isn’t different from any other market, especially when derivatives are used. PrimeBit decided to use the well-developed MT5 trading platform, and this was probably a very good idea.

MetaTrader 4

Here are some of the things that MT5 offers traders:

  • Custom Charts MT5 has advanced charting tools that traders find useful. You can adjust the timeframe and the kind of chart, which is a nice feature to have. There are also a number of indicators that are built into MT5, which is very handy for trading in any market.
  • Order Types MT5 has loads of customizable order types as a standard feature. You will be able to set limit and trailing orders with MT5, which isn’t the case at many crypto exchanges. Trailing stop-loss orders ensure that you can lock in profits in a market that is moving quickly, and not have to live at your trading terminal.
  • Layouts If you want to change how your trading interface is displayed, MT5 gives you loads of options. You can make the market that you trade the largest chart, and change how the symbols are displayed in the info box as well. There are loads of options, and MT5 makes it simple to view information the way you want.

Are Derivatives Right for You?

PrimeBit is a peer-to-peer exchange, but because it allows the use of leverage, it requires that you deposit Bitcoin with the exchange. Trading derivatives is a great way to leverage your tokens and gain more exposure to an asset, but it may not be right for every trader.

Before you start trading crypto derivatives or any kind of derivative product, it makes sense to understand how leverage can affect your trade. The more leverage you build into a trade, the more you stand to gain or lose, depending on the direction of the market.

It is very important to use stop-loss orders when you use leverage, as you will have to liquidate positions that go against you. Taking losses when trading with leverage is inevitable, and you should consider how this will affect you both financially and psychologically before you decide to enter the market.

PrimeBit offers a fully-featured demo account, and this is a good way to see how leverage works in real-market situations. The demo account is free, and if you have never used leveraged products, it is a good idea to trade for a week or two without risking actual BTC in leveraged trades.

PrimeBit is an Innovative Broker

PrimeBit is bringing some great ideas to the crypto derivatives market. The peer-to-peer structure of its exchange address the potential for problems that exist when a broker is both the counterparty, as well as the market-maker. PrimeBit has also created a solid price-setting mechanism, which would be almost impossible to ‘game’ in an attempt to influence prices on its exchange.

PrimeBit is also super easy to use and will allow just about anyone with some BTC in their wallet to trade leveraged crypto derivatives. The fact that PrimeBit only allows deposits and withdrawals with BTC may be a drawback for some traders, but it isn’t difficult to obtain BTC these days.

Overall PrimeBit is a great broker to look at if you are in the market to trade BTC, ETH, or LTC on a leveraged basis, and it will likely expand its operation as it attracts more clients. The only real downside to PrimeBit is how new it is, as it will need to establish a track record of delivering solid service to its clients.

Visit PrimeBit

PrimeBit

7.8

Ease of Use

8.0/10

Reputation

7.0/10

Fees

9.0/10

Customer Support

8.0/10

Payment Methods

7.0/10

Pros

  • High Leverage up to 200x
  • Low Trading Fees
  • Demo Accounts
  • Fast Execution
  • Low Withdrawal Fees

Cons

  • Newer Platform
  • No Proprietry Trading Platform
  • Unlicensed
  • Deposits in Bitcoin Only

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Author

Nicholas Say was born in Ann Arbor, Michigan. He has traveled extensively, lived in Uruguay for many years, and currently resides in the Far East. His writing can be found all over the web, with special emphasis placed on realistic development, and the next generation of human technology. Contact Nick@blockonomi.com

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