The entire digital asset industry looks clearly the same as it was three years ago. 2017 was a year of the Wild West, with astronomical increases in the price of crypto assets and a surge in fundraising activities. The initial coin offering in 2017 has basically disappeared. A recent report by the US crypto exchange Kraken pointed out that since then, other niche markets such as derivatives trading have experienced watershed growth.
Kraken’s November report stated: “Starting with pioneers such as Crypto Facilities, BitMEX, Derbit, BitVC, and OKCoin, derivatives trading in the crypto market has truly dominated in 2017. This is also in line with established exchanges such as CME and CBOE. Entering the crypto market coincides.”
The report pointed out that “the trading volume of derivatives is now at least 4.6 times the volume of spot trading, and we believe this trend may continue.” Spot Bitcoin (BTC) is a real BTC that can be bought and sold at the current market exchange rate. Foreign transfer. Derivatives are products traded on exchanges. They are actually bets on the future price of Bitcoin.
In recent years, investor demand for crypto derivatives has surged. Taking advantage of this trend, platforms such as BitMEX have been developed, new exchanges such as Bybit have surfaced, and existing exchanges such as Binance have also added their own derivatives products.
The Chicago Mercantile Exchange (CME) launched Bitcoin futures in 2017, followed by Bitcoin options trading in 2020. The Chicago Board Options Exchange (CBOE) also launched Bitcoin futures in 2017, although CBOE delisted Bitcoin futures in 2019.
Kraken’s report details: “Compared with spot trading volume, the growth of derivatives trading volume is obvious.” Cryptocurrency spot trading has declined since the industry’s last bull market high, and derivatives trading has attracted attention. :
“From the second quarter of 2017 to the first quarter of 2018, the spot trading volume rose sharply from a low of around US$58 billion to a high of US$570 billion, and then fell sharply to a low of US$104 billion in the past two years. Since then, derivatives have completely replaced the spot market as the dominant market, while the spot trading volume has not fully recovered. The nominal trading volume of derivatives has surged from less than US$6 billion in the second quarter of 2017 to more than 17,000 in the third quarter of 2020 One hundred million U.S. dollars..”
In terms of the fundamentals of growth, Kraken believes that leverage plays a role. Derivatives traders can basically borrow large amounts of funds to trade based on the funds in their accounts.
Although derivatives have been booming since 2017, regulation is catching up. In recent years, most cryptocurrency derivatives platforms have banned U.S. customers. The US authorities also accused BitMEX of violating regulatory requirements.
