Derivatives or derivatives play an important role in any financial markets. They appear at a certain stage of the evolution of the market, and as they themselves begin to contribute to the expansion of its infrastructure and increasing interest from investors to the basic asset.
According to the technical director of the International Cryptobiri Cex.io Dmitry Volkov, the digital assets market develops according to the same laws as traditional markets, only much faster. When a certain level of trading volume and liquidity is reached, derivatives appear on it, which reduce the threshold for entering and allow you to earn on any course or absence of it. Improving accessibility contributes to the growth of turnover on the basic market and its popularity.
In the market, the first derivative was the first derivatives of the price difference (CFD), which, because of their close contact with the spot market, motivate traders perform hedging transactions there. The following cryptophullures appeared, proposing more complex and effective arbitration and new hedging methods with less capital requirements. Further, the crypton was saw options as the digital currency itself and on its derivatives, which once again increased liquidity and opened even more opportunities to participants, for example, to earn, even if the market is not moving at all.
For many professional traders, Derivatives were the missing link for full bidding, in particular, risk hedging. An analyst Exante Victor Argon believes that without futures and options, the crypton can not be called «adults».
He says that there are many derivative strategies worked out by traders in other markets. Many professionals and major financial players of the financial world abstained from bidding at cryptors until 2020, when calculated bitcoin options appeared on the CME Stock Exchange. From this time, a legal set of four main tools based on the BTS began to be available:
Bakkt and Erisx supply futures for many market participants were the only opportunity to legally acquire cryptocurrency. Bakkt Exchange opened in September 2019 and opened with institutional investors access to Bitcoin. At first, trading volumes were small, less than a million dollars a day. But already in November, as the BTC courses are drawdts, investors have grown, and the daily volumes reached tens of millions. In May 2020, similar supply futures on ETH (ETH) opened at the Erisx Stock Exchange (ETH), with which institutional can also work.
From January 2020, the Russian traders have become available contracts for the difference of prices from Cex.io Broker, allowing simultaneously to trade on the delivery and inexpensive markets using one infrastructure.
According to research, today more than a third of large clients of the famous Fidelity Foundation has cryptocurrency. The influx of capital from major players significantly affects the capitalization of the market and gives hope for a positive trend, while the long-term collapse is unlikely.
Institutional organizations use ribs to enter the market, and thereby stimulate the increase in quotations. It is such a picture that we watched in November-February, when after the fall of the BTC course, buyers and the rapid growth of the course above $ 10,000 occurred to $ 7,000.
Cryptoderivatives trade is gaining popularity, since it makes it possible to effectively insure coursework risks (hedge) and shorten, and this makes it possible to diversify trading strategies. Parallel traders can use the capabilities of the leverage to get a large profit even with a slight equity, which cannot be achieved on the spot market.
Despite the significant volumes in the derivatives market, it can still be called efficient and organized due to the insufficient level of liquidity. Since most instruments are calculated, and not supplies, it enhances the speculative nature of the crypton, providing an indirect effect on the base asset rate.
In addition, because of the new principles of value transfer, there are still some problems with regulation, infrastructure and mechanisms to combat money laundering.
All these factors slow down the market development and distribution. However, the emergence of new products, tools and services will gradually expand the ecosystem, and promote global use.
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