Bitlevex Review 2021

What is BITLEVEX?

BITLEVEX is a cryptocurrency option trading platform.

Founded in 2019 in Tallinn, Estonia by Latvian national Mikhail Skoblov, the options trading platform has raised 500,000 euros in a seed funding round in spring 2019. Calling itself the next-generation BTC derivative platform, BITLEVEX’ value proposition is based on security, transparency, unique product range, user engagement and a well-designed user interface.

What is option trading?

Before we delve deeper into the ins and outs of BITLEVEX, it’s important to explain the most important terminology first, namely – what is options trading?

An option is a contract giving you the right to buy an underlying asset at a specific price on a certain date. Basically, it’s an option for you to buy something in the future at a today agreed upon price.

Professional traders often use options to trade with leverage. This way, options allow its investors to leverage their trade up to 100x, meaning that you could theoretically buy the equivalent value of 100 bitcoins at the price of just one bitcoin. Please be aware, however, that trading with leverage bears great risks: in most cases there is a knock-out price at which your entire investment becomes worthless \(in the case of 100x leverage the knock-out is just 1% below your purchase price\). Given that cryptocurrencies are very volatile, you should only trade with leverage with the amount of money that you are comfortable to lose if something goes wrong.

An important use case for options are so-called hedges. If a trader has large exposure to one asset \(e.g. a large investment in bitcoin\), the trader can use options \(e.g. a PUT with high leverage\) to minimize the risks if the trade goes wrong.

How to buy crypto options on BITLEVEX

Now that you know what options trading is, you can get started with BITLEVEX.

On BITLEVEX, you can buy options for most digital assets. Please note, however, that you are not actually buying the underlying digital asset.

Step 1: Create an account

Before you can start buying crypto options, you have to open a free account on BITLEVEX. Simply enter the details and you’re good to go.

Step 2: Upgrade your balance

Great, you signed up to BITLEVEX! When starting off, your balance is naturally zero. In the top bar you can find your current balance and can upgrade it with a click on the green plus-button.

A popup will open and guide you through a 3-step process to pay money to your account. First, you need to choose whether you’d like to pay your deposit with fiat money or crypto. BITLEVEX allows credits cards such as Visa and MasterCard as well as Bitcoin transfers and popular e-wallet systems. In the second step you choose the amount you want to transfer to the exchange. And finally, you get a confirmation of the payment.

Step 3: Buy crypto options

As soon as you have your deposit on your account you can buy cryptocurrency options on BITLEVEX.

Options are structured in a specific way. First you need to select if you want to buy a PUT or a CALL option. PUT thereby stands for a bet on falling prices, while you can bet on rising prices using CALL options. Second, you need to select the leverage: the more leverage the higher is your potential profit, but also the risk of a total loss increases with rising leverage. Third, you need the time to maturity. This will determine when the option expires. And last but not least, you need to set your investment amount.

For instance, if you think that bitcoin will be worth more in six months than now and that the maximum price correction to the downside is 20%, you can buy a CALL option with a leverage of 5 and a time of maturity of 6 months.

Exiting your trade

Your trade will automatically expire at the beforehand determined point in time. Nevertheless, you can also close your trade at an earlier stage and realize any gains or losses before the end of the contract.

Payment methods

You can charge your balance on BITLEVEX using bank transfer, credit cards, Webmoney and bitcoin.

Limits and Fees

BITLEVEX defines clear limits per trade to manage your exposure. As a general rule, the option trade amount must be more than $20 and is capped at $10.000. The trade amount is depending on your leverage, meaning the higher the leverage, the less the investment amount.

When trading options, the issuer of an option is - legally speaking - giving you a credit and charging interest for using leverage. The same is true with BITLEVEX. The annual interest rate at BITLEVEX is 10% which is on the lower end of the spectrum when compared to other bitcoin derivates platforms.

BITLEVEX does not charge any fees on deposits from wire transfer or credit cards. For withdrawals, the fee varies depending on the incurred banking costs and are deducted from your BITLEVEX balance. If you want to withdraw funds in bitcoin, there is a withdrawal fee of 5%.

Is Bitlevex trustworthy?

While BITLEVEX is a rather young company, established only in late 2019, it managed to obtain a license by the Estonian Financial Intelligence Unit as a provider of virtual currency services. The licence involves proving that people in key positions are reputable, the adherence to Estonian anti-money-laundering laws and organizational measures.

Being a rather young platform, BITLEVEX does not yet have as extensive customer support pages. This shouldn’t be a big problem if you’re experienced with options trading. However, if you’re new to this kind of investment, you may need to contact their customer support more often than with other platforms.

Conclusion

If you want to delve into crypto options trading, be it to hedge your bitcoin investment, be it for speculation, BITLEVEX is here for you. The platform is rather easy-to-use, onboarding and trading is straightforward and fees are in line with other derivates platforms. Being a rather young platform, however, you may want to be a bit more cautious and may need to contact customer support more often if you have questions or encounter issues.