Why The Future is Bright For Crypto Derivatives

FinanceFeeds Editorial Team

Bitcoin and its peers, bolstered by the Blockchain, have seen a massive inflow of capital from institutions and venture capitals. For institutions, some of which are not backwards in expressing their distaste for cryptocurrencies, nevertheless realize that they have no option but to be on the crypto train, as there is a huge demand from their clients.

crypto derivatives

The biggest move we saw in recent months was the first ever adoption of a Bitcoin ETF onto a US exchange. This was a move a long time in the making, but it eventually happened and it brought the crypto realm one step closer to acceptance in the eyes of the regulators and the market participants. This move was certainly a popular one, with the ETF seeing over 24 million shares changing hands in its first 24 hours, making this the second most popularly traded ETF debut ever. The exchange-traded crypto market has seen over US$400 billion in volume in 2021 so far.

DeFi is DeFinitely One to Watch

DeFi is no shrinking violet either, with a massive locked-in value of over US$140 billion, covering everything from staking, to prediction markets, to KYC and stablecoins. Derivatives trading of crypto is also booming. This is where contracts are bought and sold on underlying assets, which include cryptos, synthetic tokens and stablecoins.

A unique study by Carnegie Mellon University, has shown just how popular this market is, with on a typical day over $100 billion in trading volume, which gives the NYSE a run for its money.

Derivative Trading on Crypto

In a landmark funding round, one company, Paradigm, which brings liquidity to crypto derivatives traders, managed to privately raise $35 million from a variety of both crypto focused and more generic venture capital firms. A partner from one of them, Jump Capital, said his,

“Institutional infrastructure in crypto capital markets is still nascent and liquidity highly fragmented. Paradigm is disrupting that by providing a single point of access to global liquidity and a unified execution and settlement layer to most institutional traders in the world.”

According to SynFutures, one of the major players in the crypto derivatives realm,

“SynFutures is an innovative project that is driving the growth of DeFi by bringing complex financial instruments such as derivatives to digital assets. People in TradFi have been using derivatives to gain leverage, hedge their positions, or amplify the returns for decades. Users can access the same services in DeFi, thanks to projects like SynFutures..”

SynFutures is a platform that offers traders open and centralized access to trade derivatives. On top of this it allows them to create their own markets by building their own synthesized contracts on a huge selection of assets, including Ethereum compatible ones, cross chain and also off chain assets too.

Synthetic assets are an exciting new addition to DeFi. Quite simply, they represent an asset such as a stock, bond, currencies, cryptocurrencies, options, futures, NFTs, and interest rates and trading them on a platform like SynFutures means there is deep liquidity for all contracts, both existing and newly synthesized and it means users don’t to have worry about holding and storing the underlying assets. A blessing for those individuals that no longer need to go through the laborious process of registering and onboarding with a variety of exchanges and then holding wallets.

The future is bright for the derivatives crypto market and it’s one that institutions are sitting up and paying attention to as the volume and popularity grows each month.

Read this next

Retail FX

Overcharts partners with dxFeed for CME Group Market Depth

“More and more traders are using Market Depth while conducting volume analysis. Its primary function is to help traders identify potential support and resistance levels.”

Digital Assets

CoinGecko expands collaboration with CER.live security rating

CoinGecko, one of the earliest crypto data aggregators, has integrated the security score data from the CER.live rating. The trust assessments given to crypto projects will be integrated into their pages on CoinGecko website to draw users’ attention to the importance of security.

Metaverse Gaming NFT

Klaytn taps Parity Technologies to build infrastructure for Klaytn-Substrate

Klaytn has initiated a collaboration with blockchain infrastructure company Parity Technologies to strengthen its tech stack and meet the demands of enterprises looking to harness the crypto technology.

Retail FX

US Retail FX brokers suffer steep fall in client deposits, Trading.com racked up $46K

Retail FX deposits at US brokerages, which have been struggling to eke out a profit in a strict regulatory environment, dropped in March 2022 by $35 million, CFTC data showed.

Retail FX

eToro supports Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI)

Israeli social trading network eToro has added support for trading three new tokens. Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI) are the next coins to join eToro’s list of featured digital assets.

Executive Moves

LiquidityBook hires Fintech veteran Jonathan Cross to lead EMEA business

LiquidityBook, a provider of FIX and OMS trading solutions for both the buy and sell-side, has added Jonathan Cross to its business team for the EMEA region.

Retail FX

Interactive Brokers’ traders now have direct access to TradingView

Professional charting and trading platform, TradingView has integrated the US-listed brokerage firm Interactive Brokers as the latest online trading partner.

Digital Assets

This Web3 infrastructure provider is on the verge of a radical upgrade

The crypto industry fueled the anticipation of the arrival of web3 with the introduction of Decentralized Finance, Metaverse, and more. And today, that web3 is finding support from various developers looking to build and develop the space to extract the most benefits out of it.

Digital Assets

Crypto bots: trading assistant 

The cryptocurrency market is a volatile one, with huge gains and dramatic dips. However, the most informed traders can use automated tools to maximize profits while minimizing risks. 

<