The cryptocurrency derivatives market is in rude health. According to a recent report by TokenInsight, total futures trading volume exceeded $2 trillion in the first quarter of 2020, up 314% from the four quarters’ average of 2019. Daily trading volume also reached a whopping $23.3 billion, an increase of 274% vs 2018.
There is no shortage of options for crypto traders looking to profit from future price movements, with well over a dozen popular derivatives platforms vying for your business. Here are the top players to consider.
The world’s first regulated tokenized security exchange, Currency.com seeks to bridge the gap between crypto and traditional financial assets. After recognizing that crypto hodlers had no access to regulated financial markets unless they first swapped their coins for fiat, the platform sought to simplify the process, making derivatives, equities, indices, commodities and bonds freely available for movers and shakers in the cryptosphere. How? By enabling traders to purchase with crypto, then acting as the go-between to buy securities from Capital.com with fiat.
Completely regulated by the Belarusian government, and with offices in London and Gibraltar, Currency.com accepts deposits in crypto and fiat and lets users cash out whenever they like by swapping tokens, again, for crypto or fiat. Currency.com maintains full reserves, meaning a bank run can never occur: users’ funds are stored in an account entirely separate from the platform’s operational account and cannot be borrowed or lent – even for margin trading – to fund operations.
Huobi launched its derivatives platform at the end of 2018 but has rapidly become one of the dominant exchanges; according to the aforementioned 2020 report, only Huobi and OKEx had volumes above $400 billion for the first quarter. Having recently rebranded from Huobi DM to Huobi Futures and introduced coin-margined perpetual contracts, the user-friendly exchange is looking to build on its 22% share of all crypto derivatives as the market continues to mature.
Like its competitor Currency.com, Huobi’s ambition is to bridge the gap between the worlds of crypto and traditional finance and it too enables users to trade crypto with leverage of up to 100x. It’s not possible to withdraw fiat with Huobi at present, but the platform atones with tight spreads thanks to its high liquidity.
OKEx is one of the world’s most trusted derivatives platforms, handling almost $1.5 billion of BTC futures volume daily. In March of this year, around 28% of the total volume for BTC futures was traded on the exchange. Founded in Hong Kong but now based in Malta, OKEx’s futures, perpetual swaps and options are available in over 100 countries, with the platform configured for 11 languages including Russian and Chinese. OKEx offers leverage of up to 100x and is known for its industry-leading security and deep liquidity. On the downside, only bitcoin options are available at present.
Launched in 2014, Arthur Hayes’ Seychelles-registered BitMEX is still a juggernaut in the derivatives space, even if it’s lost half its market share in the past six months following the Black Thursday selloff. BitMEX recently launched ETH/USD futures contracts, with leverage of up to 50x, though you can find 100x on BTC/USD. Popular with experienced traders due to its high-frequency capabilities and complex, detail-rich interface, BitMEX nonetheless operates entirely on bitcoin, meaning you can only deposit and withdraw BTC.
Binance Futures, an arm of Changpeng Zhao’s dominant crypto exchange, has become the fastest-growing derivatives platform by volume since launching in September 2019; in fact, it was the only major exchange to witness derivatives trading volumes grow in April, rising to $108 billion. Binance Futures accounts for 14% of the crypto derivatives market and recently launched options trading on its mobile app, with desktop availability to follow. With a vast suite of trading products, a highly-rated UI, and the biggest 24-hour volume on BTC/USDT at present, Binance is going from strength to strength.
If the first quarter of 2020 was any judge, the derivatives market could end the year having seen volume close in on $10 trillion. By using any of the aforementioned platforms, you can grab yourself a piece of the action.