BitMEX is a platform that allows users to trade leveraged derivative contracts using bitcoin as collateral. This article aims to demystify the process of tracking your BitMEX positions on CoinTracker.
Sync your account
The first step to track your BitMEX positions is to add your BitMEX account to CoinTracker.
Interpreting your transactions
After you sync your BitMEX account with CoinTracker, you will see a summary of your transactions on the wallets page. Note that the list of cryptocurrencies displayed includes those in the notional trades of your derivative contracts (not just the cryptocurrencies that are actually in your wallet).
If you drill into the transactions of any particular cryptocurrency within your BitMEX wallet, you’ll see the leveraged notional positions involving that cryptocurrency on the transactions page. For example, if you had bought 10 contracts of the ETHUSD perpetual contract, you will see a transaction row like the one below:
Do not be alarmed by the numbers if they seem large — this transaction is merely the trading pair that your derivative contract (in this example the ETHUSD perpetual contract) is indexed on. The actual BTC value of your contract is a fraction of the nominal dollar value of the trade, determined by using the multiplier for the contract. These trades are marked as “Margin” positions and are ignored for cost basis and capital gains calculations for your CoinTracker account.
Because all notional positions, gains, and losses on BitMEX are posted in bitcoin, the realized profit and loss figures will be displayed in CoinTracker under your BitMEX bitcoin wallet. Realized profit and loss (PnL) figures will be tagged with either “Trading Gain” or “Trading Loss” along with a chip displaying the amount gained or lost. Note that any unrealized gains will not be displayed on this page even if you are able to see them on your BitMEX account. The figures shown for realized PnL entries are net of all fees charged by BitMex.
These PnL entries are the only figures that will matter for tax calculations from BitMEX. If you make a trading gain, then the cost basis of the quantity gained will be 0. If you make a trading loss, it will be as if you spent the BTC and normal capital gains or losses will apply. Counterintuitively, this can mean that you can incur a capital gain even at a trading loss, if the bitcoin you are losing is at an unrealized capital gain compared to when you acquired it.
Nic buys 1 BTC for $1,000. He buys 5,000 contracts of ETHUSD on BitMEX for 1 BTC (assume no leverage for simplicity). If the price of ETH declines 50% relative to the USD, Nic will realize a loss of 0.5 BTC when he settles the contract. If the price of BTC is $2,000 when the contract is settled, Nic will incur ($2,000 - $1,000) * 0.5 = $500 in capital gains, even though he made a trading loss, because of the appreciation in the price of BTC.