Resources/exchanges/BitMEX Tax Guide

BitMEX Tax Guide

CryptoTaxCalculator is proud to support BitMEX, one of the first exchanges to offer perpetual margin trading products. Not only do derivatives often attract different tax implications depending on your jurisdiction, but on BitMEX you also settle the trades in BTC, which adds further complexity. Fortunately we have you covered with our handy to use tax calculator.

How to calculate tax on BitMEX

Perpetual margin trading and income tax

In most countries you have both income and capital gains tax. Capital gains tax usually occurs when you dispose of cryptocurrency. However, with products like margin trading and perpetuals, in many jurisdictions the profit or loss from trading these products follow separate rules to usual trading activity. Depending on the specifics of the contracts you are trading, in many cases this is classified as trading income, and is treated similar to income tax. In this case you will not be able to claim certain concessions usually available to capital gains tax, such as long term discounts.

What we do at CryptoTaxCalculator is break out the income earned on platforms like BitMEX into a separate income category. You can then discuss with your accountant the best way to record this profit (or loss) on your tax return, based on your individual circumstances.

Capital gains when settling in crypto

Another thing to consider when trading on platforms like BitMEX is what happens when you are settling in cryptocurrency. When you are trading BitMEX BTC perpetuals, and realise a profit, the profit is added to your balance in the form of Bitcoin. The market value at the time of receipt will form the cost basis for future sales (for example if you were to later sell Bitcoin for Ethereum). However, if you were to realise a loss, this loss will be settled in BTC. If you had previously bought this BTC at a cheaper price then the current market value, then you also need to consider the capital gain when "selling" the cryptocurrency to settle your loss.

An astute reader would observe, that realising a loss can actually ultimately trigger a capital gain that is greater then your loss, and you would be "in the green" and owe taxes. In short, it is very important to keep up to date with your tax obligations, and set aside enough money at the end of the year to pay your taxes.

Example 1: Realising a profit on BTC
Date Instrument Side Quantity Realized PnL Fee Balance
4th January XBTUSD Short 1 0.1 0.005 0.095

In example 1 we close a short and rewarded with 0.1 XBT (BTC). After fees we receive 0.095 BTC. CryptoTaxCalculator will convert this value back into your local currency and record a profit. However we also create a second buy transaction, which can be used as the future cost basis for the sale of this BTC.

Date Currency Type Quantity Value
4th January BTC Realised Profit 0.095 $950
4th January BTC Buy 0.095 $950
Example 2: Realising a loss on BTC
Date Instrument Side Quantity Realized PnL Fee Balance
4th January XBTUSD Short 1 -0.1 0.005 -0.105

In example 2 we close a buy contract realising a loss of 0.105 after fees. CryptoTaxCalculator converts this value back to your local currency and records a realised loss. However we also need to consider settling the loss in BTC, and any capital gains or losses associated with this transaction.

Date Currency Type Quantity Price of BTC Profit (Loss)
1st January BTC Buy 1 $800 -
4th January BTC Realised Loss 0.105 $1000 ($105)
4th January BTC Sell 0.105 $1000 $21

In the table above, after considering the capital gains on the settlement, the actual overall position is down $84 (21 - 105).

As you can see keeping track of all this is very difficult. Fortunately CryptoTaxCalculator is one of the few tools to actually consider all these scenarios in great detail.

How to Upload Your BitMEX Data Into the Calculator

You can easily upload your BitMEX data into the calculator by following the below steps:

Import PnL CSV

  1. Click on your username in the top right corner.
  2. Navigate to the account page by clicking 'Account & Security'.
  3. On the left hand side of the page select 'Wallet -> Balances' (https://www.bitmex.com/app/wallet).
  4. In the top right corner click 'Save as CSV'.
    Download BitMEX Tax CSV
    Download BitMEX Tax CSV
  5. Upload the CSV file to CryptoTaxCalculator.

Create and add API keys

  1. Click on your username in the top right corner.
  2. Navigate to the account page by clicking 'Account & Security'.
  3. On the left hand side of the page select 'API Keys' (https://www.bitmex.com/app/apiKeys).
  4. When creating the API Key make sure the key permissions are blank, as indicated by '-'.
    Download BitMEX Tax CSV
    Download BitMEX Tax CSV
  5. Double check you have not enabled any permissions (see the circle in the above image)!
  6. Enter your 2FA if required and click 'Create API Key'.
  7. Copy the ID and Secret into CryptoTaxCalculator and click sync.

The information provided on this website is general in nature and is not tax, accounting or legal advice. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider the appropriateness of the information having regard to your own objectives, financial situation and needs and seek professional advice. Cryptotaxcalculator disclaims all and any guarantees, undertakings and warranties, expressed or implied, and is not liable for any loss or damage whatsoever (including human or computer error, negligent or otherwise, or incidental or Consequential Loss or damage) arising out of, or in connection with, any use or reliance on the information or advice in this website. The user must accept sole responsibility associated with the use of the material on this site, irrespective of the purpose for which such use or results are applied. The information in this website is no substitute for specialist advice.

Shane Brunette

CEO

Shane Brunette founded CTC back in 2018 after dealing with his own crypto tax nightmare. He has worked closely with accountants and tax lawyers to make it easy for fellow cryptocurrency users to be tax compliant.

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