Crypto derivative exchange, BitMEX, recently announced the inauguration of its novel derivative product, a prediction market. This move, akin to the well-established Polymarket, allows gamble enthusiasts to forecast real-world event outcomes.
Embracing the opportunity that derivative swaps present, BitMEX turns a zealous eye towards the serious rather than the surreal. While some may revel in the peculiar, such as betting on former President Obama’s sexuality or predicting the usage of nuclear arms by Russia before 2023 ends or even mulling the existence of extraterrestrials, BitMEX’s prediction market has chosen to root itself in concrete happenings. The exchange provides prediction contracts on various subjects, for example, FTX‘s bankruptcy claims percentage recovery rate, Bitcoin‘s Exchange Traded Fund (ETF) approval probabilities by October 17, or the likelihood of Sam Bankman-Fried landing behind bars.
Interestingly, BitMEX’s justification for this venture is rather foresighted. According to Stephan Lutz, BitMEX’s CEO, the motive is to provide traders with an opportunity to ‘ride the waves of the ever-changing world’. Enhancing return on investments by predicting real-world news outcome, Lutz professed, augments the ‘mojo’ of crypto derivatives trading by offering a chance for portfolio diversification.
However, there’s an adverse tinge to BitMEX’s so-called enhancement in trading. Considering the exchange’s past reputation — it was penalised $1.4m in January 2022 for unregistered swaps — there are questions over the potential risk for traders. In a dynamic situation where market volatility is low, this tool may indeed seem like a ‘level up’ for your trading game, but straying from conventional trading methods could also prove disastrous if not handled carefully.
BitMEX’s venture into the field of prediction markets, while promising the thrill of betting on significant global occurrences, raises eyebrows when viewed through a lens of precautious skepticism. The CEO promises the addition of more contracts in the near-term, leaving us to ponder whether BitMEX is paving the path to a new narrative in crypto trading, or, rather, marching towards another potential market implosion. Either way, it’s a boundary-pushing development in the crypto world, embodying both promising prospects and lurking uncertainties.
Source: Coindesk
