Summary of main points
1. $ 2.7 trillion in volume in the third quarter 2020, TokenInsight were acquired digital asset exchange derivatives industry 42 relevant data, digital asset derivatives market turnover reported $ 2.7 trillion the previous quarter growth of 25.1%, compared with 19 Year- on-year growth of 159.4% in the third quarter of the year.
2. The trading volume of flexible digital asset derivatives continues to rise, and the year-to-date growth rate is 4.35 times that of the spot market year-to-date, with higher flexibility. At the same time, exchanges continue to enrich products and functions.
3. Risk Control September trading volume fell, the market positions down, or as a precursor to exit funds and variable follow-up market, investors should be prepared to risk control.
4. 30% increase in holdings In the third quarter of 2020, the market-wide increase in holdings was 30%, 81% lower than the second quarter (111%). Market open interest and trading volume increase together.
5. 2.1 times Derivatives/spot trading volume on large comprehensive exchanges fell to 2.1 times from 4.4 times last quarter. The expansion advantages of the spot business and the competition in the derivatives industry led to a decline in the proportion of derivatives transactions in this quarter.
6. New players such as Huobi Futures, Bit.com and Bitwell have entered the options market, enriching the product range.
7. Compliance This quarter, the proportion of transactions on compliant exchanges increased to 1.39%, and the transaction volume of compliant derivatives increased by 73.3%.
8. Perpetual contracts large-scale derivatives exchanges still take perpetual contracts as their main business, and the growth of the trading volume of the leading derivatives exchanges is less than the market average, and industry competition has reduced the concentration of trading volume distribution.
9. To be considered The popularity of derivatives trading on decentralized exchanges gradually decreased in August and September, and its trading volume was affected by the overall derivatives market. The trading volume of dYdX contract products accounted for 6% of its total trading volume when it was launched, and the actual market demand for decentralized exchange contract products in the short term needs to be considered.
Preface
The derivatives market in 2020Q3 is slightly deserted due to the popularity of DeFi, but in fact the trading volume of derivatives is still growing. Derivatives trading volume in the 2020Q3 quarter increased by 25% compared to the previous quarter. In addition to futures contracts, the options market also shined in the third quarter. Exchanges focusing on option trading such as bit.com, bitwell and DEX have also been launched.
In terms of the categories of futures contracts, we have seen two phenomena: First, the trading categories of the relative top exchanges are becoming more complete, basically covering the U-standard and currency-based contracts of mainstream assets. The differentiation of competition is gradually decreasing. We can foresee that in Q4 and in the longer-term future, direct competition due to the reduction of product differentiation will be more intense; the second phenomenon is that for the hotter Token category in the market (especially DeFi projects) ), its futures contract transactions will be launched in a relatively short period of time, and the categories and asset classes are becoming more complete.
In terms of DEX, DEX, which is different from spot trading, can bring potentially huge wealth effects. Derivative DEX is actually relatively scarce at this point. There may be a huge gap between the underlying assets of spot DEX trading and centralized exchanges, and the assets will go online ahead of the centralized exchange. However, the trading targets of derivatives are not so diversified, and there is no better solution for the liquidity of decentralized exchanges.
Another point worth paying attention to is the compliance situation. The punishment of BitMEX and the increase in trading volume of fully compliant derivatives exchanges have confirmed that traditional financial capital and institutional investors are increasingly interested in the digital asset market. The key factor for the start of BTC’s future price growth.
For each exchange, due to its own reasons, the market competition pattern is also being broken. Due to compliance issues, BitMEX has suffered serious losses of assets and users, and the market position of currency-based perpetual contracts has also been constantly threatened, which has benefited other exchanges. OKEx’s delivery contract market, which has long been in the first echelon, is also being seized by exchanges that later launch delivery contracts. Binance grew rapidly in Q3, and it surpassed Huobi in September; although it is still inferior to Huobi in Q3 overall trading volume, the market share and grabbing of the top exchanges deserve attention.
Of course, we also brought TokenInsight’s third quarter update. Comprehensively judge the liquidity of the exchange through the exchange’s market data, open interest, transaction volume, web traffic, the distribution of transaction data, and API transactions.
Now you can log on TokenInsight official website to view real-time transaction data on the secondary market, different exchanges, and different assets anytime and anywhere. For more information on the derivatives market in the third quarter, Please Enjoy the Report.
1. Industry Tracking
July 2020
① Huobi Perpetual Contract is connected to Huobi Cloud;
② Matrixport launched its own derivatives exchange bit.com;
③ Digital asset exchange FTX launches AMPL futures and spot trading;
④ BitZ launched an anchor on the PAXG contract in the London bullion market, with a maximum leverage of 400 times;
⑤ ErisX, a digital asset derivatives exchange, joins the Silvergate trading network;
⑥ The new LUNA and VET asset leveraged trading services of KuCoin support 10X leverage;
⑦ Bitcoin futures and options contracts worth 1.2 billion USD expire on July 31;
⑧ The British financial regulator has agreed to Kraken’s subsidiary, Crypto Facility, to operate its derivatives platform;
August 2020
① Bingbon, a derivatives exchange, launched DOTUSDT standard contract trading;
② The listing on the INX exchange has completed the regulatory requirements for raising US$7.5 million in legal currency, and has begun to accept digital assets;
③ Huobi Global Station established a “Global Observation Area” and launched the first batch of projects YFII and YFI;
④ Coinbase announced that Marc Andreessen, a partner of American venture capital firm a16z, and Gokul Rajaram, an executive of Door Dash, have joined the Coinbase board of directors;
⑤ Two managers of Komid of Korea Exchange were sentenced to imprisonment on suspicion of fraud and embezzlement of 25 million US dollars;
⑥ Coinbit, the third largest digital asset exchange in South Korea, was seized and investigated by South Korean police for allegedly inflating trading volume and manipulating market prices;
⑦ Coincheck, a digital asset exchange under the Monex Group, announced the launch of Japan’s first IEO in cooperation with Hashpalette;
⑧ Three types of perpetual contracts: ATOM, LINK and DOT are listed on BitZ;
⑨ Coinbase released the ERC-20 standard token listing security review guide;
September 2020
① Huobi launched an option contract, the industry’s first USDT standard forward option contract;
② Huobi USDT/USD perpetual contract is officially launched, supporting multiples of 1x-1000x;
③ The total transaction volume of bitcoin options on bit.com exceeds 360 million US dollars, second only to Deribit and CME;
④ Bitfinex launches traditional stock index derivative contracts settled by USDT, providing 100 times leverage;
⑤ Four DeFi currency contracts of SUN, SUSHI, YFI and UNI are listed on BitZ;
⑥ Binance launched USDT pricing DeFi composite index trading contract.
2. Ecological picture of the digital asset exchange industry
3. Trading dynamics
3.1 Market volume
“The derivatives market achieved a breakthrough this quarter, with total trading volume increasing to $2.7 trillion, and for the first time a single-day trading volume that surpassed the spot market
In this quarter, TokenInsight obtained data from 42 exchanges in the digital asset derivatives industry, and carried out detailed research using the classification of derivatives exchanges in the previous quarter.
In the third quarter of 2020, the trading volume of the digital asset derivatives market reported $2.7 trillion, an increase of 25.1% from the previous quarter and a year-on-year increase of 159.4% from the third quarter of 2019.
From 19 to this quarter, the market-wide derivatives transaction volume, source: TokenInsight
In the same period, the total spot market transaction volume of digital assets is shown on the left. This quarter, the total spot market transaction volume decreased by about 26.5% from the previous quarter, and fell 12.2% year-on-year from the third quarter of 2019. Different from the downward trend in the spot trading volume of digital assets this year, the trading volume of digital asset derivatives has continued to rise, with a year-to-date increase of 4.35 times that of the spot trading volume over the same period last year.
The total transaction volume of digital asset derivatives in this quarter was approximately 40.32% of the total transaction volume, an increase of 12.92% compared with the previous quarter, and accounted for 67.55% of the total market spot transaction volume. Consistent with the expectations in the second quarter quarterly report of TokenInsight, the third quarter derivatives transaction volume ushered in a breakthrough of over $2 trillion.
19Q3-20Q3 quarterly full market spot trading volume & 20Q3 derivatives and spot trading volume comparison, source: TokenInsight
“The digital asset derivatives market fluctuated significantly this quarter, and the depressed market sentiment in June was fully ignited at the end of July
The average daily trading volume of the digital asset derivatives market this quarter was $29.35B. The highest single-day transaction occurred on July 28 and reported $70.8B, which was $10.5B higher than the peak of the previous quarter ($60.3B); while the lowest single-day transaction occurred in On July 19, it was reported at $9.3B, which was lower than the single-day low of the previous quarter ($11.7B).
20Q3 Market-wide derivatives and spot daily trading volume, source: TokenInsight
In this quarter, the standard deviation of the daily trading volume of derivatives in the whole market was 13, which was not only higher than in the second quarter (7.92), but still 3.14 higher than in the first quarter (9.86) when the market was extreme. The standard deviation of daily trading volume data this quarter shows that the volatility of the digital asset derivatives market has increased significantly. After the sluggish market in June ended, depressed market sentiment led to a retaliatory rebound in derivatives trading volume at the end of July. The single-day trading volume even surpassed the spot market twice on July 28 and August 2, successfully creating history.
At the same time, the correlation coefficient between the derivatives trading volume and the spot trading volume in this quarter is 0.6, which is similar to the previous quarter, showing a strong correlation.
However, it is worth noting that, similar to the spot market, the noise in the digital asset derivatives market has been severe for a long time. In the survey this quarter, there are many exchanges with abnormal trading volume and open interest, and the authenticity of the overall market data needs to be improved. Therefore, the data disclosed in this digital asset derivatives report should be used more as indicators for trend analysis. For a single exchange, the accuracy of transaction data is open to question.
“From the perspective of the proportion of people, retail investors prefer high leverage. In terms of the proportion of positions held, the leverage of 5-20 times is relatively concentrated. At present, we can clearly feel that as BTC hits a new high this year, users are more interested in derivatives. The enthusiasm is also rising.”
Qi Ye, CEO of Huobi Global Station
3.2 Market open interest
“This quarter’s open interest maintains the upward trend of the previous quarter. While trading activity has increased, the market continues to accumulate long and short energy
In the third quarter of 2020, the market-wide open interest (Open Interest) rose from $5.55B at the beginning of the quarter to $7.22B at the end of the quarter, an increase of 30%, which was 81% lower than the increase in the previous quarter (111%). In the last quarter, under the low market volatility, investors generally chose a longer holding period and waited for opportunities brought by asset price fluctuations. In this quarter, the market’s open interest and trading volume increased together, showing the frequent in and out of short-term funds and the continuous accumulation of long and short energy this quarter. Investors’ willingness to trade increased this quarter, but they still have doubts about the direction of market outlook price fluctuations, leading to an escalation of the confrontation between long and short funds.
20Q3 Comparison of daily holdings of the whole market and TI Index, source: TokenInsight
This quarter, the market open interest and TI Index trend showed a good agreement. The rise in Bitcoin prices at the end of July drove the market, resulting in a 63.5% increase in trading volume in August compared with July. After the shock in August, the Bitcoin price fell in September, but still maintained a certain degree of volatility, resulting in a slight drop (-12%) in trading volume in September compared to August.
The increase in price volatility in this quarter has brought profitability to short-term investors. Compared with spot products, derivatives have higher flexibility and can amplify market sentiment. Once the market fluctuates, the magnitude of changes in the trading volume of derivatives will be higher than that of spot products. At the same time, when the trading volume fell in September, the market position dropped. The withdrawal of funds may be a precursor to the subsequent market changes. Investors should remain vigilant and control risks.
Market-wide derivatives trading volume in 20Q3 each month & 20Q3 monthly position changes, source: TokenInsight
4. Exchange analysis
4.1 Overall comparison of exchanges
“The top three exchanges in the derivatives exchange industry accounted for 48% of the total transaction volume, and industry competition has led to a decrease in the concentration of transaction volume distribution.
The total volume of transactions on various derivatives exchanges this quarter is shown in the figure below. Among them, the trading volume of the top three exchanges accounted for 48%, and the trading volume of the top six exchanges accounted for 61%, down 13% and 22% respectively from the second quarter of 2020.
20Q3 The trading volume of all derivatives exchanges (excluding exchanges with abnormal trading volume) and market concentration, source: TokenInsight
Note: BitZ, Hopex, Bitforex have not fully opened API trading
During the same period, the top three companies in the spot exchange industry accounted for approximately 16% of the transaction volume, which was one-third of that of the derivatives exchange industry. Compared with the data of the previous quarter (one-eighth) , this proportion was significantly higher increase. The main reason for this change is the intensified competition in the spot market this quarter, and the top trading platforms with good fundamentals have stronger expansion capabilities in a volatile market environment; at the same time, the good growth potential of the derivatives market has caused various exchanges to be here. The continuous development of the field and the diversification of their products and services by players in the market has promoted the increase in the degree of dispersion of transaction volume.
At the same time, taking the total trading volume of derivatives as the measurement standard, the top eight exchanges’ trading volume is compared with the total market trading volume, and the top eight exchanges’ trading volume comparison is shown in the following figure:
Comparison of the market share of the top eight derivatives exchanges (in terms of trading volume) in 20Q3 compared with the previous quarter, source: TokenInsight
Among the above eight exchanges, Binance’s market share (in terms of transaction volume) in this quarter has achieved better growth compared to the previous quarter, BitMEX has seen a decline, and the market share of other exchanges is basically the same as the previous quarter. At the same time, six exchanges , including Huobi Futures, Binance, OKEx, BitMEX, Bybit, and BitZ, had a transaction volume of more than $100B this quarter.
Comparison of trading volume of the top six derivatives exchanges (in terms of trading volume) in 20Q3, source: TokenInsight
[1] BitZ has not fully opened API trading
4.2 “100 Billion Dollar Club”
In addition to the five exchanges with a turnover of $100B in the previous quarter, the “100 Billion Dollar Club” welcomed a new member BitZ this quarter. At the same time, the quarterly rate of change in the trading volume of the top exchanges has changed significantly this year. Except that Binance maintained a relatively strong growth momentum in the second and third quarters, Huobi and OKEx reversed the negative growth of the previous quarter in this quarter, with volume growth of 20.35% and 16.77% respectively, but still slightly lower than the industry growth this quarter Mean (25.1%).
Quarterly change rate of trading volume on the “$100B Club” derivatives exchange in the second and third quarters, source: TokenInsight
The expansion of Binance derivatives this year squeezed part of the OKEx and BitMEX market share. However , competition among the top exchanges eased slightly this quarter, with Huobi Futures, OKEx and Bybit all maintaining the same market share as last quarter. In addition, BitZ launched a number of contract products this quarter, covering multiple DeFi varieties such as SUN, SUSHI, YFI, etc., with a transaction volume of more than $100B.
Market share changes of the “$100B Club” derivatives exchange in the second and third quarters, source: TokenInsight
4.3 Exchange classification
According to the characteristics of each exchange, the derivatives exchanges currently on the market can be divided into the following categories. Large-scale integrated exchanges are developing in multiple perspectives such as spot, derivatives and OTC; large-scale derivatives exchanges are dedicated to developing contract transactions; compliance exchanges focus on the establishment of compliance systems; decentralized exchanges are dYdX listed BTC perpetual contract as representative.
20Q3 The classification standard of derivatives exchanges in this report, source: TokenInsight
“This quarter, the entire contract market has developed very rapidly. The major exchanges have opened DeFi-related contracts to give more users the ability to carry out financial hedging operations at a certain price to reduce their own transaction risks. Fourth In the quarter, as overseas institutions aggressively purchase mainstream digital assets, mainstream digital assets may usher in a small bull market, and the contract market will continue to grow exponentially as the trading market expands.”
BitZ coin in VP Maggie
4.4 Large derivatives exchange
“The main business of large-scale derivatives exchanges is perpetual contracts, and the volume of transactions this quarter has grown less than the market average
Based on the quarterly total turnover exceeding $50B, and mainly providing derivatives trading as the standard, large derivatives exchanges include Bybit, FTX and BitMEX. Large-scale derivatives exchanges adopt a strategic positioning aimed at market segments and professionally serve derivatives traders. Only FTX has some spot transactions ($7.2B, accounting for 10.8% of its total trading volume). At the same time, the trading volume of large derivatives exchanges is mainly derived from perpetual contracts, of which Bybit does not provide delivery contracts.
Perpetual and delivery contracts on large derivatives exchanges, source: TokenInsight
20Q3 daily trading volume of large derivatives exchanges, source: TokenInsight
In this quarter, the average daily turnover of FTX in this quarter increased by 24.9% compared with the previous quarter, which was slightly higher than the market average (22.8%). However, the growth of Bybit’s trading volume was much lower than the market average, while BitMEX’s average daily trading volume continued to decline (-12.5%). Large derivatives exchanges were hit by the development of other types of exchanges’ derivatives business during the quarter.
20Q2 and Q3 large-scale derivatives exchange daily average trading volume changes, source: TokenInsight
4.5 Large integrated exchange
“The average derivatives trading volume of large comprehensive exchanges this quarter was 2.1 times the spot trading volume, and the gap between the top two exchanges in trading volume was narrowed
In this quarter, the ratio of large-scale comprehensive exchange derivatives trading volume to spot trading volume decreased from 4.4 times in the previous quarter to 2.1 times. The daily trading volume comparison of large-scale comprehensive exchange derivatives is shown in the figure below. Huobi Futures still ranked first in average daily trading volume this quarter, reaching $5.67B, but its second-ranked Binance average daily trading volume ($5.26B) gap narrowed from the leading 30% in the previous quarter to 7.8%. The average daily turnover of OKEx is $3.09B.
20Q3 daily trading volume of derivatives on large comprehensive exchanges, source: TokenInsight
The expansion advantages of large-scale integrated exchanges in the spot business and competition in the derivatives industry have led to a decline in the proportion of derivatives transactions this quarter. Huobi Futures’ derivatives trading volume is 3.06 times the spot trading volume, accounting for 75.4% of its total trading volume, and it is a large-scale integrated exchange with the largest proportion of derivatives business. Binance and OKEx derivatives trading volume accounted for 61.2% and 63.9% of its total trading volume, respectively. Compared with the previous quarter, the ratio of the derivatives trading volume of the three exchanges to their total trading volume dropped by more than 10%.
In terms of growth, Binance’s average daily turnover in this quarter increased by 42.5% from the previous quarter, far exceeding the market average (22.8%). The average daily volume growth of Huobi Futures and OKEx was lower than the market average, reaching 19% and 15.5%.
“In the third quarter, affected by DeFi, users have a heavier wait-and-see sentiment. Large institutions have gradually purchased and held mainstream assets, and have not used them to invest in other digital assets.”
Hobbit HBTC CEO Ju Jianhua
20Q2 and Q3 large-scale comprehensive exchange daily average trading volume changes, source: TokenInsight
In this quarter, Binance derivatives holdings increased from $600M at the beginning of the quarter to $982M at the end of the quarter, a growth rate of 63.5%. Huobi Futures and OKEx derivatives holdings at the beginning of the quarter were $730M and $787M, respectively, which were higher than Binance’s initial quarterly value, but the growth only reached 13% and 12%, so that the holdings at the end of the quarter were overtaken by Binance.
It is worth noting that Binance’s holdings fluctuated sharply between the end of August and the beginning of September. This phenomenon may be caused by a large amount of funds on the platform. At the same time, when the market’s open interest fell on September 25, Binance’s open interest did not change significantly.
The gap between OKEx and Huobi’s average daily holdings narrowed to 7% from 24% in the previous quarter. The large changes in the position data during this quarter reflect to a certain extent the fierce competition for funds among various platforms.
20Q3 Large-scale comprehensive exchange derivatives daily holdings, source: TokenInsight
20Q2 – 20Q3 Derivatives/spot volume ratio of large comprehensive exchanges, source: TokenInsight
4.6 Compliance Exchange
“The rapid growth of trading volume on some compliant exchanges has increased the proportion of the overall derivatives trading volume on compliant exchanges
Bakkt, CME, and Kraken Futures (Crypto Facilities) are the compliant exchanges for the data obtained in this report. The three reported a total transaction volume of $37.47B this quarter. Among the three compliant exchanges, CME and Bakkt focus on the provision of derivatives trading services; while Kraken’s spot business volume was $22.16B this quarter, which was $3.6 times the volume of derivatives trading.
Overview of 20Q2 and Q3 compliant exchange trading volume, source: TokenInsight
In the third quarter, the transaction volume of derivatives on compliant exchanges increased by 73.3% (market average: 25.1%). Among them, Bakkt’s transaction volume increased by 351.9%, and CME’s growth volume was 80.6%, which also far exceeded the market average. Of the three compliant exchanges, only Kraken grew below the market average, at 11.3%. At the same time, the market share of compliant exchanges achieved a good expansion this quarter, and the trading volume of derivatives increased from 1% in the second quarter to 1.39%.
Although the digital asset derivatives compliance system is still at an early stage, data shows that there is a demand for compliance transactions focused on derivatives in the market, and such exchanges have good development potential. However, the improvement of the compliance system is affected by many factors. For now, the trading activity of such exchanges still has a large room for improvement.
Percentage of trading volume of compliant exchanges in 20Q3, source: TokenInsight
4.7 Decentralized exchange
“Decentralized exchange derivatives trading fever gradually decreased in August and September, and its trading volume was affected by the overall derivatives market
The decentralized exchange dYdX launched the PBTC-USDC trading pair in June, and reported a trading volume of approximately $68.7M this quarter, accounting for approximately 0.0025% of the total market volume.
The trading volume of this contract product launched on dYdX has received certain market attention after its launch in June. Its trading volume in July increased by 14% month-on-month, while the market-wide derivatives trading volume increased by only 7% during the same period. However, the product’s popularity gradually faded in August and September, and the proportion of transaction volume continued to decrease.
dYdX contract trading volume and its ratio to the total market derivatives trading volume, source: TokenInsight
In addition, the trading volume of this contract product as a percentage of dYdX’s total trading volume also continued to decrease, accounting for about 10% of dYdX’s total trading volume this quarter, down 6% from when it was launched in June. The decentralized derivatives market is not yet mature, and its short-term actual market demand needs to be considered. But at the same time, there are continuous decentralized exchanges in the industry to deploy derivatives, and DEXs that focus on providing contract transactions such as MCDEX and Injective Protocol have been launched one after another.
In addition, it is worth noting that the correlation coefficient between the dYdX contract and the market-wide decentralized exchange transaction volume is only 0.19, the correlation coefficient with the dYdX transaction volume is 0.42, and the correlation coefficient with the market-wide derivatives transaction volume is 0.71. The data shows that for contract products launched by decentralized exchanges, their trading volume is more susceptible to the impact of the overall derivatives market.
dYdX Q3 transaction volume distribution, source: TokenInsight
“Compared with the spot, the contract is of course more powerful. The contract has an extra dimension of time than the spot. In the contract market, users can either go long or short; not only can you set a leverage less than 1 times to reduce profit and loss, It is also possible to set a leverage of more than 1 times to expand profits and losses.”
OKEx CEO Jay Hao
5. Product overview
5.1 Contract distribution
“While the volume of perpetual contracts continues to grow, some exchanges choose to deliver contracts
As shown in the figure below, in the third quarter of 2020, the market share of perpetual contract transactions rose to 80%. This figure was 39.1% in the first quarter of 2020 and 75.2% in the second quarter. This change shows that the focus of digital asset derivatives traders continues to shift from delivery contracts to perpetual contracts. At the same time, this phenomenon favors exchanges whose main business is perpetual contracts.
20Q3 full market perpetual contract and delivery contract volume comparison, source: TokenInsight
Due to the different product strategies of each exchange’s own strategic positioning, taking the five large exchanges with quarterly trading volume of more than $50B as an example, the composition of their derivatives trading volume also differs greatly. See the figure below for details.
20Q3 Large-scale derivatives/comprehensive exchange contract distribution comparison, source: TokenInsight
In this quarter, Huobi Futures’ perpetual contract volume increased from $125B to $254B, and the percentage of perpetual contract volume increased by 13.7%, making it the exchange with the largest change in volume composition among large exchanges. The dominance of OKEx delivery contract volume also weakened, with the proportion of its delivery contracts falling by 4% this quarter. However, while exchanges generally shifted their focus to perpetual contracts, Binance began to make efforts to deliver contracts. While the volume of perpetual contracts increased, Binance delivery contracts increased 8.8 times this quarter. Combined with sustainable long-term contract volume Binance occupy the first position in the market, you can get to know the fierce competition among major exchanges, the exchanges active layout market segments, grab market share.
5.2 Main contract
“Affected by the rise of DeFi, the dominant positioning of BTC contracts weakened, and the trading volume of Ethereum and DeFi currency contracts increased significantly
In this quarter, BTC contract volume accounted for 65% of the total derivatives market volume, a 17% decrease from the previous quarter; the volume of the three major contracts (that is, BTC, ETH and EOS) accounted for a decrease of 10% from the previous quarter to 85%. Due to the popularity of DeFi this quarter, the volume of Ethereum contracts increased significantly compared with the previous quarter. At the same time, exchanges continue to launch DeFi currency contracts, and the increase in the diversity of the derivatives market has caused an impact on the proportion of Bitcoin contract transactions and weakened their dominant position.
20Q3 main contract market share compared with the previous quarter, source: TokenInsight
“Positive contracts, I expect there will be a lot of improvement, now in addition to BTC and ETH, contracts in other currencies will also bring improvements.”
Lin, Head of Business Asia, Deribit
“The digital asset industry is copying the traditional financial industry, and it is a 1:2 copy. It is very promising in all aspects but the risks are also great. How to find a balance between technology and supervision is the key.”
BitMart founder Schalt
5.3 Options overview
“New players enter the game, and digital asset exchanges actively deploy the options market
Following the launch of American BTC option contracts on Binance in the second quarter of this year, this quarter, Huobi Futures launched USDT standard forward option contracts and officially entered the options market. This has also enriched the current product categories in the options market. At the same time, the pure derivatives trading platform Bit.com was launched this quarter, and its options products had occupied 6% market share at the end of September. In general, the current digital asset options market is still a niche, but large exchanges have entered options to show that the exchanges attach importance to the future potential of options.
From a product perspective, the current options market is still dominated by European options, but due to technology development, market positioning and other reasons, options provided by different exchanges are different in design. In addition to the T-type quotation mechanism adopted by Deribit, OKEx, Huobi, etc., there are also inquiry mechanisms represented by FTX and ATM mechanisms represented by Binance.
Deribit’s option turnover accounted for more than 80% of the market this quarter, firmly occupying the number one position in the options market. At the same time, its daily trading volume can basically reach more than $45M. Among other exchanges, only OKEx, CME and Bit.com have a daily trading volume of tens of millions.
In terms of holdings, at the end of September 2020, the value of Deribit’s open BTC options once reached $1.7B. During the same period, the holdings of CME, OKEx, and bit.com reached $295M, $121M, and $105M, respectively. The four are the main players in the current options market.
20Q3 BTC option trading volume of various exchanges, data collection range is September 24-9-9-30, source: Skew, TokenInsight
Comparison of open interest of BTC options on various exchanges, source: Skew, TokenInsight
6. Popularity and user distribution
6.1 User popularity
“At the end of July, the search popularity of the keyword “Bitcoin Futures” reached the peak of this quarter, and the popularity in China was high
This quarter TokenInsight conducted a survey on the popularity of digital asset derivatives keywords to analyze the user search popularity in the derivatives market.
As shown in the figure below, taking the widely distributed keyword “Bitcoin Futures” in the search terms related to digital asset derivatives as an example, TokenInsight has obtained the popularity trend of this keyword in 20Q3: in the third quarter, “Bitcoin Futures” The overall heat trend is in a state of turbulence with large fluctuations, and the heat value reached the peak of this season at the end of July [3] (100). Similarly, the popularity of “Bitcoin Derivatives” also peaked in late July. This phenomenon originated from the rise in Bitcoin prices during this period.
[3] Peak metric: The heat value represents the search heat relative to the highest point in the specified area and time in the chart. The highest heat score is 100 points; the heat is half of the former is 50; if there is not enough data, it is 0.
20Q3 Bitcoin Futures Google popularity trend chart, source: Google Trend; TokenInsight
In terms of search sources, the top five countries/regions ranked by popularity are China (88), Cyprus (67), Singapore (60) and Lebanon (49).
20Q3 Bitcoin Futures Google’s heat distribution map, source: Google Trend; TokenInsight
7.2 User distribution
“Binance’s visit volume exceeded 100 million in the third quarter, and Huobi’s visit volume doubled compared with the second quarter. BitMEX has obvious user advantages in the pure derivatives platform
As shown in the figure below, the number of Binance visits [2] in the third quarter of 2020 exceeded 100 million, which is significantly higher than other derivatives exchanges. BitMEX’s overall traffic this quarter is still in the leading position among pure derivatives trading platforms, surpassing Bybit, Deribit and approximately 218% and 1,053%, respectively, and the traffic advantage is obvious. At the same time, Binance and Huobi derivatives platform visits increased compared with the previous quarter, and Huobi derivatives platform visits increased by nearly 120%.
[2] The comprehensive exchange traffic statistics are its derivatives platform, Futures has been omitted in the expression
Statistics of visits to online platform of derivatives exchange in 20Q3, source: Similarweb; TokenInsight
20Q3 Derivatives Exchange online platform visits changed compared with Q2, source: Similarweb; TokenInsight
The number of Twitter followers reflects the exchange’s user base to a certain extent. According to Twitter data, in platforms that only provide derivatives trading, the number of followers on Twitter accounts ranges from high to low to Bybit (91,000) and BitMEX (79,900) , Deribit (17,100), Hopex (1,557). While BitMEX and Bybit have a relatively large number of fans, their transaction volume also ranks among the top five in the industry. Although Hopex ranks in the top ten by volume, the number of fans is only about 1,500.
20Q3 pure derivatives exchange Twitter followers statistics, source: Twitter; TokenInsight
Media support (random order)
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