BitMEX’s New Basket Index Is The Gateway To The Top 10 Meme Coins

• The MEMEMEXTUSDT index tracks the common performance of the top 10 meme coins by market cap.
• It allows investors to spread the risk across multiple assets or amplify their gains with up to 25x leverage.
• The basket could propel mainstream adoption of meme coins through increased accessibility and managed risk.

Derivatives crypto exchange BitMEX just launched the MEMEMEXTUSDT contract that provides investors exposure to the leading meme coins through a single financial instrument.

Let's explore BitMEX's new financial product and what it means for the crypto industry.

What Is MEMEMEXTUSDT?

The MEMEMEXTUSDT basket index tracks the performance of the top 10 meme coins by market cap. Currently, it includes:

• Dogecoin ($DOGE)
• Shiba Inu ($SHIB)
• Pepe ($PEPE)
• DogWifHat ($WIF)
• Bonk ($BONK)
• Floki ($FLOKI)
• Brett ($BRETT)
• Book of Meme ($BOME)
• Dog Runes ($DOG)
• Mog Coin ($MOG)

Since meme coin prices are extremely volatile, the index is based on a weighted average and is rebalanced monthly for accuracy. BitMEX compares its new instrument to the popular stock market index S&P 500, which tracks the performance of the top 500 large-cap companies in the US.

This launch aligns with BitMEX's ongoing trading product expansion, following the introduction of BitMEX Options and the highly leveraged (200x) $ETH perpetual swap (ETHUSD).

A perpetual swap is a derivative contract allowing traders to speculate on an asset's future price without an expiration date.

Similarly, the MEMEMEXTUSDT $USDT-margined perpetual swap allows investors to speculate on the combined price movement of popular meme coins with up to 25x leverage.

Here are more details about BitMEX's new basket index:

• Each contract represents 0.0001 MEMEMEXT.
• Lot size is 1,000, meaning you can only trade the contract in multiples of 1,000.
• The maker fee is -0.015%, and the taker fee is 0.075%.
• The initial margin is 4% of the contract value (the minimum amount of $USDT you need to hold in your BitMEX account to initiate a position using leverage).
• The maintenance margin is 2% of the contract value (the minimum amount of $USDT you must keep in your account to avoid a margin call if the contract price moves against you).

To celebrate the launch, BitMEX announced a 10K $USDT giveaway. Meme coin enthusiasts have three days left to test their luck.

Introducing the BitMEX Meme Basket Index Perp - the S&P500 for crypto memecoins. It's your gateway to get exposure to all the top meme coins at once, like $PEPE, $SHIB, $WIF, $DOGE, and $BONK.

Join our $500 Giveaway:

1. Follow @BitMEX, Like & RT
2. Tag 3 friends + @BitMEX
3.... pic.twitter.com/S3IK9rhGyc

- BitMEX (@BitMEX) July 4, 2024

The Double-Edged Sword of BitMEX LeverageThe key benefit of BitMEX's meme coin basket index is risk diversification. Putting all your eggs in one basket (for example, investing all your funds in $PEPE) is daring at the very least - if the coin's price drops, you lose everything.

The MEMEMEXTUSDT basket is like having a carton of eggs. Even if a few meme coins fail, the positive performance of others in the basket can help offset those losses.

Moreover,MEMEMEXTUSDT simplifies trading because you don't have to track the performance of each asset individually.

Risk-tolerant traders can amplify their initial investment with BitMEX's 25x leverage. For example, if you have $1K and the basket costs $1 per unit, you can borrow another $24K from BitMEX to control a larger position.

If the basket's price increases to $2, you would make a $49K profit instead of $1K. However, leverage is a double-edged sword: if the basket's price drops to $0.5, you'd lose $24.5K instead of just $500.

Is MEMEMEXTUSDT a Way To Mainstream Adoption?

BitMEX's new basket index introduction is good news not only for individual investors but for the entire meme coin market. By offering a more accessible way to trade meme tokens, BitMEX could attract risk-averse investors and fuel growth in the sector through increased demand.

Furthermore, like the S&P 500 index reflects the overall US stock market, the MEMEMEXTUSDT could become a benchmark for meme coin performance.

On the other hand, leverage could increase volatility in underlying coin prices. An influx of new investors unfamiliar with the drastic price swings of meme coins would only exacerbate the situation.

Ultimately, the MEMEMEXTUSDT launch could encourage other exchanges to develop similar products.

We may see more niche-specific baskets targeting dog-themed meme coins, celebrity-backed coins, or GameFi tokens.

Final Thoughts

BitMEX's new basket index might help bring meme coins into the mainstream financial arena. Despite the inherent risks of leverage, the potential for broader adoption and increased accessibility for investors could be a tipping point for the meme coin sector.

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