For new cryptocurrency exchanges, the game is getting a lot harder to play: older, well-established exchanges are held in high regard by both users and the general public in the industry, while those with institutional backing seem more legitimate to newcomers to the space. However, that hasn’t held Phemex back from flourishing in less than half a year since its inception. From their zero fee approach to constant innovation, the exchange is doing their best to carve out a place for themselves at the very top — and if past performance is any indication of the future, Phemex is certain to become a household name in the crypto community in the years to come.
Zero Fees for Spot Trading Mean Best Value for Money
Many exchanges struggle to find something that sets them apart from others so they can find their own niche. Phemex approaches this issue in an obvious, but unprecedented way: they offer zero-fee spot trading within a premium membership model, both on its web platform and within its native application. While other cryptocurrency exchanges offer competitive fees, and many of them only charge a symbolic fee, Phemex has taken this to a new level.
There are several ways in which a user can get premium membership to gain access to no fees and other perks, like conditional orders, especially useful for veteran traders who have a plan on how to approach their trades, as well as no limits on withdrawals that can be done on an hourly basis. For starters, you can see if Premium is for you in the first place by having a friend, who is already a Premium user, give you a trial of the feature through the “Gift” option. The alternative is following these steps to get a 30 day trial:
- Inviting a friend to the exchange through your own referral code
- Make a deposit of 0.02 BTC or more, and
- Complete a BTC/USD transaction worth USD 1,000 or more.
Important to note is that the trial does not offer all of the options that a full Premium subscription does, like hourly withdrawals and lack of withdrawal limits, as well as conditional orders. This is still a significant step up from a standard trading profile, however, which doesn’t offer spot trading at all — only contract trading, which charges some fees (a 0.075% Taker and a 0.025% Maker fee).
For those who don’t have friends to gift them a trial and/or don’t want to go through the steps mentioned above, there is still the option of purchasing a Premium membership. Paid for in USDT, a month-long membership will cost you USDT 9.99, 90 days are available for USDT 19.99, and year-long access will be yours for USDT 69.99. This also answers the questions of how Phemex is able to offer zero-fee spot trading: unlike many other exchanges, fees simply do not make up the majority of their business model. While all traders are welcome on the exchange, it is most geared towards experienced traders who know what they need and realize the benefit of paying a relatively low price to gain access to all the options Phemex has to offer.
Other Notable Features
As mentioned above, Phemex does charge some fees — maker and taker fees (0.025% and 0.075%, respectively), which are found on every exchange. The reason for the higher taker fee is that Phemex is looking to encourage users to fill the order books, ensuring higher liquidity for the exchange.
Another important fee is the so-called “dynamic funding fee” — a relatively common fee on a number of crypto derivatives exchanges, but not necessarily understood by all participants. Holders of long or short positions (those who hope the asset will increase in value or those who hope for the opposite, respectively) are directly paid the “funding rate,” which can be either positive or negative in value, meaning they can either gain or lose money. The exchange charges this fee every eight hours. This means that every eight hours, in the example of a negative funding rate, holders of short contracts will pay holders of long contracts a certain percentage of their position.
Sub-accounts are also a part of the platform, allowing for the isolation of different trading strategies by the same trader. You can transfer your funds freely between sub-accounts, and you can even employ trading bots within certain limits, allowing for a less invested approach.
Last but not least, Phemex also offers a welcome bonus of up to USD 72 in bonus funds that can be used for various activities. The bonus is broken up into three parts: USD 2 that you get when registering, USD 10 after you complete their social media requirements (like following on Twitter and retweeting), and another USD 60 funding bonus, available after you send either 0.2 BTC or USD 1,500 in a single deposit to your new account.
Consistent Growth Showcasing Consistent Quality
But where does this exchange come from? If you haven’t been following cryptocurrency-related news in the past half year or so, you may have missed their existence completely. Phemex launched on November 25th, 2019, in Singapore, and offers support for six different languages: English, Russian, Spanish, Japanese, Korean, and Chinese. The name itself is a portmanteau of Pheme, the Greek goddess of fame and renown, and MEX, or mercantile exchange.
It is led by eight former Morgan Stanley Executives, with over 40 years of combined experience in delivering high-frequency technology. Their CEO, Jack Tao, used to lead Morgan Stanley’s Benchmark Execution Strategies (BXS) team, responsible for building and deploying electronic trading strategies for multiple asset classes globally. Trading System Architect Yang Du used to be the system architect of the Hong Kong Exchanges and Clearing, while the company’s Head of Marketing, Cecilia Wang, served as the CEO of J.C.Moritz, an investment consulting company, for seven years.
Keeping the team’s impressive background in mind, it is perhaps not surprising that Phemex has soared from relative unknown to one of the top 10 cryptocurrency exchanges for derivatives exchanges on CoinMarketCap, as well as swiftly becoming the fastest growing exchange of 2020. The team knows their target audience, having worked in a more traditional financial market for years, and knows how that the way to appeal to them is by taking care of all their needs — especially those they may not be aware of themselves.
No Fear of Innovation: How Phemex Anticipates Their Users’ Needs
For now, Phemex offers six cryptocurrency trading pairs, with BTC/USD making up the vast majority of their volume — although others also generate interest among their user base. However, when comparing trading volumes among different pairs, the exchange’s youth should also be kept in mind: since its inception at the end of 2019, when it launched with three trading pairs already supported, it has added new ones with enviable speed. Plus, it also offers something not often seen in the cryptocurrency world: a non-crypto asset, the GOLD/USD trading pair.
As its name implies, GOLD/USD is pegged to gold and settled in nominal USD, with the price determined by a combination of several different indexes. This comes as yet another way — aside from the lack of fees — that Phemex is looking after their users, as they launched this trading pair as a hedge against the volatility inherent in the cryptocurrency space. The exchange also promises more non-cryptocurrency trading pairs to come, making for an interesting blend of assets certain to satisfy both traditional investors just trying their hand at crypto trading and weathered crypto traders.
Comparison: Phemex vs Other Exchanges
On its website, Phemex claims its two biggest competitors to be BitMEX and Bitfinex. While their maker and taker fees are the same as the ones on BitMEX, Bitfinex is significantly more expensive than both of them. However, BitMEX does not have a native mobile app, which both Phemex and Bitfinex do. There is one significant drawback to both Phemex and BitMEX compared to Bitfinex: they only support Bitcoin deposits, while Bitfinex supports Bitcoin, various altcoins, as well as fiat deposits. Phemex, however, offers settling in both BTC and USD, which BitMEX only does in BTC, and Bitfinex only in USDT. Other than that, the three exchanges are extremely similar to each other — the differences between them are, arguably, a matter of personal preference.
All in all, if you’re looking for serious trading in the range of the professionalism offered by traditional markets, along with high speed, security, and dependability, Phemex is the exchange for you.