Who is BitMex...?
Well, it is an exchange in the Seychelles.
Seychelles...?
Indeed.
As I discuss in a new volg, the Seychelles is a fantastic place to visit if one is into beaches, grandiose granite formations, gambling, and underwater anything....
Also, it is one of those rare places where one can happily eat all day long off the trees and bushes everywhere, and yes, drink from the streams.
It is also a small isolated nation that has used its jurisdictional flexibility and legacy of British legal framework to draw and create economic activity. However we see this approach, as 'tax haven' or as 'tax competition' depends primary on where we are looking from. Likewise, the view of regulation turns on whether we seek to see freedom of action (and consequence) that privacy ensures as key, or to see total forced transparency as necessary to prove innocence.
Suffice to say here that nature, and thus people, will always seek to cultivate any and all niches, including those most micro, in any way possible. The Seychelles, like many small, under-resourced places, is only acting naturally in using a form of jurisdictional arbitrage to its own (people's) advantage. Bermuda is just the same.
But this is not the most interesting thing about BitMex. It is that this exchange is fully functional as a derivatives and margin trading platform, with a Futures betting capacity. The key difference between this Futures market and the imminent USA futures markets openings, is that BitMex is settling in Bitcoin itself. Not fiat.
I reflected on this today, from the point of view of considering whether Anglo-American crypto-communities may be really over-estimating the impact that a fiat based futures market will have on Bitcoin itself, either up or down.
The fiat based futures markets may well prove to be far more impactful on the traditional derivatives, and analog (equities, bonds) markets, than on Bitcoin.
Perhaps the derivative markets we should be paying attention to, in terms of understanding what a future Futures model will actually look like, and what will have a meaningful impact on Bitcoin price and investment /store of value adoption, are the ones trading and settling in BTC itself.