Moreover, while smaller traders disproportionately account for liquidations, "chatbox evidence suggests that many users are obsessively trading 24/7.”
"Korean traders seem to be active at all hours of the day, indicating that trading may be an all-consuming activity for many of them," the researchers said.
They added that “derivatives instruments attract a culture of long-biased highly leveraged speculators” which makes BitMEX “home to many professional outfits that control thousands of bitcoins and manage dozens of accounts.”
In “addition to retail speculators, BitMEX is utilized by highly sophisticated traders which echoes the claims made by a professional market marker about the usefulness of derivatives in cryptocurrency,” the paper says.
“An example of a large cluster would be the one rooted from Bitcoin address 1KiJkugknjgW6AHXNgVQgNuo3b5DqsVFmk which owns 86 BitMEX accounts. This address has sent approximately 13,900 [USD 764.7m] bitcoins to BitMEX but has extracted over 72,100 bitcoins from it.“
This said, the available market data shows that BitMEX accounts for a relatively minor share of total liquidations. Of the roughly USD 1.34bn worth of liquidations carried out in the past 24 hours (09:15 UTC), only USD 24.5m took place on the derivatives exchange, representing about 1.8% of the total.