Phemex is the newly launched crypto derivatives trading platform and has generated a lot of interest around it. In less than six months of existence, the exchange is posting an average daily trading volume of above $350 million, which is a significant feat in itself.
According to its founding members, Phemex differs a lot from its peers and aims to bring professionalism, trust, and efficiency in the trading process, which this marketplace lacks currently. It lists itself as a direct competitor to some of the established crypto derivatives platforms like BitMEX and Bitfinex.
Now, given all these factors and successes in a short time, is Phemex worth trading on, and is it a legit exchange? Let’s check it out in this review guide.
What is Phemex?
Phemex was established on 25th Nov 2019 by eight former Morgan Stanley executives and is registered in Singapore. It aims to become the world’s most trustworthy cryptocurrency derivatives exchange platform with a customer-first approach.
The name Phemex is derived from the Greek word Pheme (Fama) which means the public’s voice and MEX stand for mercantile exchange.
It currently offers to trade in perpetual swaps of major coins and has plans to list traditional financial products including S&P 500 stocks, indices, forex, commodities, energy, and many more.
Phemex is conceptualized and developed keeping in mind the evolving needs of the crypto margin trading market and ensuring a high availability rate. Further, it claims to be the fastest crypto derivatives trading platform in the market. Its trade engine can handle up to 300,000 transactions per second and has a latency rate of less than 1 millisecond, which means instant trade order execution.
It not only focuses on retail users but also facilitates smooth onboarding for traditional institution players by providing state-of-the-art FIX API and sub-account functions.
Phemex Supports over 20 different digital assets, including BTC, ETH, LTC, LINK, AAVE, and DOGE. The supported crypto assets form more than 50 trading pairs, add most are settled in the USDT.
Some of the crypto trading pairs are BTC/USDT, ETH/USDT, XRP/USDT, LINK/USDT, XTZ/USD, and LTC/USDT.
Separately, it also offers to trade in the GOLD/USD futures contract. On BTC/USD and GOLD/USD futures contracts, it offers up to 100X leverage. And up to 20X leverage on the rest of the crypto pairs.
Phemex offers 5main types of orders: market order, limit order, conditional order, stop-loss order, and take-profit order.
1. Market Order
Market orders will be executed immediately when you place them at the prevailing price of the particular asset you buy or sell.
While the market orders are perfect for urgent orders, you have to pay close attention to the order book before placing the order. If your market order is too large, it will typically attract a market impact cost, making the transaction quite costly.
2. Limit Order
You have to specify the minimum or maximum price you want your buy or sell order to be executed with a limit order. Therefore, these orders are not executed immediately as they have to wait for your preferred price to be attained.
Limit orders add liquidity to the order books, and so Phemex will charge lower fees or give you a market maker rebate.
The problem with limit orders is that they might never be executed if the price does not get to your specified level.
3. Conditional Order
Conditional orders are more like limit orders as they will be submitted automatically when the specified condition is met.
With conditional orders, you have to specify the trigger price, mark price, or index price that should be met to execute the conditional order.
Conditional orders are a little complicated, and therefore they are often ideal for experienced traders.
4. Stop-Loss Order
Stop-loss orders allow you to specify a minimum price at which to close your order to ensure you do not suffer massive losses if the prices keep dropping.
A stop-loss order is a risk management tool that you can use to limit losses for your open position and also as a tool to enter the market at your desired entry point without having to do it manually.
5. Take-Profit Order
Take-profit orders are more like stop-loss, but their primary purpose is to guarantee that you make a minimum amount of profit.
Here you set the order to execute at a specific point when the price is moving your way. You can use this order to specify when a market or limit order will be executed to guarantee you make some profit.
6. Advanced Orders
Phemex also has some advanced functions like post-only order and close on trigger order, which traders also need to know before they start trading.
- Post-only order: A limit order that is not executed immediately can be considered a post-only order. The purpose is not to take liquidity from the order books, and they are often used as passive orders to earn maker rebates.
- Close on trigger orders: This advanced order type can be used with take-profit and stop-loss orders, and you can enable it by checking the “close on trigger” box. The purpose of this advanced order type is to prioritize some orders as an order with the box checked is considered a high priority.
Phemex Product Offerings
Phemex is built to cater to all kinds of traders. It achieves this by offering a combination of products that the traders can use to earn from their digital coins.
Therefore, you will not be restricted to just buying and holding crypto until the price rises to resell for a profit. Here is an overview of the main products traders will get on the Phemex exchange.
1. Leverage Trading
Leveraged trading has become quite popular in the crypto world over the years as it allows traders to maximize their profit by opening larger positions than their actual investment.
Phemex supports leverage trading with up to 100x leverage. It means that you can open a full position worth $10,000 with an actual investment of just $100. If you go long on your position, then a 1% increase in the asset price will amplify your gains 100 times.
However, if the price goes in the wrong direction and decreases by just 1%, this will be enough to trigger liquidation.
It is important to note that margin or leverage trading on Phemex is only allowed for specific trading pairs. The exchange currently enables you to trade with margin on at least 7 different pairs: BTC/USD, ETH/USD, XRP/USD, LINK/USD, XTZ/USD, LTC/USD, and GOLD/USD.
Leveraged trading provides an easy way to amplify your earnings with slight market movement in your direction. However, it is also one of the riskiest forms of crypto trading, as slight price changes in the wrong direction can quickly wipe out your initial investment.
2. Spot Trading
The Phemex platform also supports spot trading, which is the more traditional way of making money with digital assets by selling and buying different assets.
Although the Phemex spot trading market maintains most traditional crypto trading structures, it has a few unique features.
One such feature is their zero fees model that you can enjoy by paying for their Premium membership package. The package will offer significant saving to high volume and frequent traders as they will not need to pay fees for every transaction they make.
3. Contract Trading
Phemex provides perpetual contracts to make futures trading possible for their users. Perpetual contracts are derivatives contracts that will allow crypto traders to get exposure to the price of an asset without having to buy and hold it.
Perpetual contracts have the benefits of not worrying about where or how to store the assets you hold. Moreover, these contracts will not have an expiry date, meaning you can go long or short and close the position anytime you want.
Phemex allows traders to trade perpetual contracts with leverage. Using leverage amplifies your earnings from the position if the market goes your way.
4. Phemex Sub-Accounts
Phemex allows users to create sub-accounts, which is another unique feature that many experienced traders will like about the crypto trading platform.
This unique system allows traders to create a sub-account within their main account. With a sub-account, traders can open both long and short positions to ensure they will still earn no matter how the market moves.
With two accounts in one, you get separate balances and different permission levels, making it possible to have isolated trading strategies.
Phemex allows traders to use sub-accounts with trading bots and make it easy to transfer balances between the different accounts.
Phemex Trading Fees
The transactions fees you pay on Phemex will depend on whether you are doing spot or contract trading and whether you are a standard or premium member.
Standard members doing spot trading will pay 0.1% per transaction, while Premium members do not pay most transaction fees. Additionally, traders on the Premium trial will also not pay fees for any spot trading they do within their trial period.
Phemex follows a maker fee-taker fee rate structure for their contract trading. Market makers that add liquidity to the Phemex books get a maker rebate of 0.025%, meaning they will not need to pay any fees for their transaction.
Market takers that will remove liquidity from the Phemex books pay a taker fee of 0.075% per transaction. The charges are the same for all trading pairs, and unlike with other exchanges, they will also not vary according to your trading volume.
Phemex Deposits and Withdrawals
Now, speaking of funding options, it only accepts bitcoin to keep things less complicated. Therefore, if you want to start trading on the platform, you must make sure you have crypto on another wallet that you can send to your Phemex wallet.
Regarding deposit limits, Phemex wallet and trading account have a minimum deposit limit of 0.00000001 for BTC, ETH, LTC, and most other crypto assets that the exchange supports.
The minimum withdrawal limit is 0.001 BTC for bitcoin, and Phemex users pay a withdrawal fee of 0.005 BTC. However, Phemex withdrawal fees largely depend on the network as the exchange also maintains a zero fees policy for withdrawals. Therefore the 0.005 BTC is the Bitcoin network fee.
Standard traders and those on the Premium trial package can withdraw up to 2 BTC per day. Also, traders need to note that they have to deposit at least 10 USDT before they can withdraw funds from their bitcoin trading accounts on Phemex.
Phemex has a simple and intuitive trading platform and offers web-based and mobile trading platforms. The trading interface includes an order book, chart window, order form, contact details, recent trades, depth chart, trade account. The trading interface is fully customizable and can be arranged through drag and drop at your preferred place to get the best view.
The platform boasts a minimalistic design interface, making it suitable for every class of traders. You can easily select the trading pair from the drop-down options menu on the top left corner beside the Phemex logo. Once you select the pair, your trading screen gets updated with the relevant data and chart. Let’s look at the other features of the platform:
- TA tools and chart
Phemex’s charting feature is powered by Tradingview, one of the most used charting solutions by beginners and professional investment traders. It gives you access to all advanced technical indicators and tools which help you in doing advanced technical analysis.
You can place multiple indicators and tools on the chart at once, to have a better understanding of the price levels. Also, it features a professional chart, where you can select bar, candles, and lines chart type in multiple time frames ranging from 1 min to 12 months.
- Order book
Phemex features a vertically arranged order book, which is quite easy to read and understand. You can easily analyze the trading activity and using the depth chart, you can easily determine the market sentiments.
In the contract details window, you get the latest price of the contract, 24-hour turnover, volume, open interest, funding rate, and predicted rate.
- Mobile app
Phemex has a mobile app to allow users to buy and sell digital assets from anywhere and cater to those who dislike trading on web-based platforms.
Their mobile app is available for both iOS and Android devices, so you can download it from Apple Store or Google Store, depending on the device you have.
The app is also fully functional as it will include most of the functionalities and tools you get on the web-based trading platform. They include charts, technical analysis tools, and trading indicators.
Besides buying and selling crypto, traders can monitor their positions and analyze market trends on their mobile app, meaning most traders that use the app will never need to switch to a desktop.
Another element that many traders will love about the Phemex app is the simple and clean interface that makes it more intuitive and super easy to use.
How To Start Trading On Phemex
Phemex does not require KYC documents of its users and has a pretty straightforward registration process.
For creating an account, click on the “Register” button present on the top right corner of the website. Now, fill-up the form providing your valid email id, password, and then click on “continue”. Fill in the six-digit verification code sent to your email account to successfully set up your trading account.
Now click on “go-to assets” to continue and fund your either BTC or USD trading account, as per your requirement. Your wallet balance will be updated after the successful transfer of funds to your Phemex bitcoin wallet. And don’t forget to use Phemex Invite Code to get a signup bonus
Next, click on the “Trade” option to start your trading journey.
How do I withdraw money from Phemex?
Withdrawing from your Phemex account is a breeze as you only need to input the amount you want to withdraw, the address, and complete the transaction using the usual 2FA process.
Here is a step by step guide for withdrawing from Phemex:
- Step 1: Click on “Assets” at the top right corner of the Phemex homepage.
- Step 2: Click the “Withdraw” button on the assets page
- Step 3: Click the “Address Management” link on the top right corner
- Step 4: Click the “Add Withdraw Adress” button and select the coin you want to withdraw
- Step 5: Enter the address to withdraw to and click “Confirm”
- Step 6: Click the “Withdraw” button
- Step 7: Complete 2FA to finish the process
KYC verification is not mandatory on Phemex, meaning traders can use the platform to trade anonymously. However, like with most other cryptocurrency exchanges, traders that do not complete KYC verification will have certain restrictions.
For example, you will not be eligible to join the Phemex Premium membership and enjoy all its benefits if you do not do KYC verification.
Also, you will not enjoy bonuses such as those the exchange gives to new users after registration. And your daily withdrawal limits will be lower than what verified traders can withdraw per day.
Any trader who wants to enjoy all Phemex features fully should do KYC verification. Moreover, it is a fairly straightforward process that should not take up much of your time, provided you have all the required documents.
You can easily access the KYC verification process from the homepage by going to the “Account Overview” page. Once there, you should click the “ID and Face Verification” button and follow the prompts to verify your identity by filling out the form and uploading the required documents.
Phemex provides a step-by-step guide for KYC verification, so even absolute newbies should not have any difficulties completing the process.
Phemex has a global presence, and you can access and use their platform from almost anywhere in the world. However, there are a few countries where the platform is unavailable due to regulatory issues and others such as financial sanctions.
Some of the countries where you cannot use Phemex are Cuba, Singapore, North Korea, Iran, Sudan, and Syria.
Phemex is also not available for US traders due to strict crypto regulations. The company is not registered to operate in the USA, and traders there are prohibited from using the platform.
Some traders will often use VPN and other methods to work around the restrictions, but this is not advisable because the exchange does not allow it.
Phemex Customer Support
Phemex focuses on a user-oriented development approach for customer support. It offers a 24/7 multilingual online customer support desk through live chat and different social media channels. You can even reach the Phemex CEO directly on Telegram and Twitter.
You can be sure your issues will always be resolved within a short time via the live support team. If this does not work for you, Phemex also provides email addresses you can use when you want support on different issues, such as fixing bugs, complaints, or giving feedback.
It also offers a comprehensive knowledge base on their help center. The help center will include rich material covering important topics, such as setting up your account and KYC verification.
Additionally, you can also get detailed user guides on different topics that will be very useful when having difficulties with the Phemex trading platforms.
Phemex uses multiple security features and protocols to secure its platform, user accounts, and assets.
Asset security: It uses a hierarchical deterministic cold wallet system which helps to assign a separate cold wallet address to every user. And, every transaction passes through 2-levels of human scrutiny to prevent any system manipulation.
Withdrawal requests are processed three times a day and are manually scrutinized by both founders and employees to prevent any lapses.
System security: It deploys and secures its machines on Amazon Web Services (AWS) Cloud and uses several firewalls to separate different zones and machines for meeting different trading purposes.
Trading engine security: The Phemex trading platform consists of two core components, CrossEngine and TradingEngine. Both are written in C++, which speeds and provides stability to the platform in this high-frequency trading environment.
User account security: Phemex uses two-factor authentication and bank-level double-entry bookkeeping to ensure account security. The double-entry bookkeeping prevents tampering of data and also helps to detect data manipulation much faster.
How trustworthy is Phemex?
One of the main goals of Phemex is to become the most trustworthy crypto exchange in the world. While it is still too early to tell whether the company has achieved that, given it has only been around for a few years, there are good indications that it is has become trustworthy enough.
These indications include the fact that there are now over 2 million Phemex account holders, and the number is steadily growing. The traders are spread across the world, with the only exception being a few prohibited countries.
Additionally, the exchange has never been hacked, which should give traders enough confidence that their assets will be safe.
Moreover, the fact that the exchange has more than 30 different liquidity providers indicates that it is a trustworthy company. The fact that some of the most reputable companies in the crypto industry are willing to trust them is a good sign that even traders can trust them.
Is Phemex insured?
Phemex has set up an insurance fund to help prevent auto deleveraging of trader positions. The fund helps to cushion any position with unfilled liquidation orders before the auto-deleveraging system takes over.
With the insurance funds, traders that end up with a negative balance when their leveraged position is liquidated will not need to make any further payments for the liquidated position. The funds help cover what is owed to the winning parties to ensure they get all the profits they deserve.
Therefore, insurance funds prevent massive losses to the losing trader and guarantee winning ones get everything they deserve.
The insurance funds keep growing by receiving funds from any liquidated position that are closed at a price better than the bankruptcy level. Phemex uses the insurance funds to ensure traders will never lose more than their initial investment or end up getting less than their total profits owed.
Is Phemex Exchange Regulated?
Phemex is registered in Singapore, but it is still not formally regulated, just like many other crypto exchanges, including some of the largest ones in the world like Binance. However, it has been working on getting regulated via SEBA and the Monetary Authority of Singapore (MAS).
That said, lack of regulation does not mean that it does not have to follow specific rules and regulations as its registration status means it operates under the Singapore company laws.
Additionally, Phemex is subject to specific regulations based on the registered member’s location. For example, if you use the exchange from an EU country, financial and other laws applicable to the EU will be in force.
Conclusion: Is Phemex Safe & Legit?
Phemex turns out to be a very different exchange compared to any other crypto margin platform in the market. And, every aspect of the exchange is designed, keeping users in mind. The founders are more accessible and involved in the daily crucial functions of the platform like supervising withdrawal requests, reaching out to customers, etc.
For new users, as well as professional traders, it gives a certain degree of comfort when they know the founder’s profile, their accessibility, and involvement. Now, let’s check out some of the pros and cons of Phemex.
Pros Of Phemex Exchange:
- Very transparent and reliable exchange
- Highly scalable and fat trading platform
- Experienced founders
- High leverage
- Deep liquidity levels
- Competitive trading fees
- No KYC verification needed
- Low deposit limit
- Strong security infrastructure
- Suitable for all types of traders
- Good customer support
In my view, Phemex is worth considering for crypto margin trading. It provides a seamless trading experience and gives the ability to trade in a multi-asset environment.
With the integration of L3 market data soon, Phemex will be way ahead compared to any other margin trading platform in the market.