A Brief analysis and enlightenment on crypto derivatives!

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crypto derivative trading platforms


The cryptocurrency market is effectively evolving into a substantial ecosystem. Today, the total number of crypto coins available in the market exceeds 2000. Each of them predominantly focuses on a specific type of application or a use case. And all of them are put to use with the help of the resourceful blockchain technology.

With the constant advancements in technology, the way blockchain-based cryptocurrencies function has also advanced. One particular advancement from that is the inception of crypto derivatives trading platforms. If you are an active entrepreneur in the crypto sphere, you would have definitely come across the term crypto derivatives. But if you are a beginner, let’s take a quick glance at what they mean.

What are crypto derivatives?

In standard terms, a “derivative” is a financial contract between two parties based on an underlying asset’s future price. Derivatives do not contain a value of their own. The name itself implies that it “derives “ value from another asset. In the case of cryptocurrency derivatives, the value is derived from the price of cryptocurrencies.

There are three primary forms of derivatives such as,

SWAP – Swap derivative is where two parties agree to exchange cash flows or liabilities in the future. The most common swaps involve interest swaps, loans, bonds, etc.

FUTURES – This refers to the obligation of buyers and sellers to exchange an asset, such as commodities. The buyer or seller must set the price of the asset beforehand, and exchange at the set price, despite the current market prices.

OPTIONS – Here, the buyer or seller has a right and not an obligation, to buy or sell at a predetermined price, by a specific timeline.

Now, let’s take a look at some interesting numbers divulging the evolution of crypto derivative trading platforms over the years, and future predictions!

Evolution of crypto derivative trading platforms

As derivatives help crypto businesses in terms of more efficiency and reducing the price volatility, they have gained huge traction in the market over the years. Derivatives have played a crucial role in how far Bitcoin has evolved as an asset class. The first derivative for Bitcoin was in the form of a futures contract. Bitcoin is one of the most traded cryptocurrencies worldwide, and Bitcoin derivatives are the most popular of all.

  • Futures were the most dominant form of Bitcoin derivative in the initial years. But later, in 2016, Bitcoin’s perpetual swap attracted a wide range of investors and saw a huge rise in the trading volumes of derivative exchanges.
  • At the end of 2017, the volume of derivative exchanges saw a massive spike, up to 40%, becoming the main force behind the spiraled Bitcoin price value today.
  • Since February 2018, the top Crypto derivative exchanges accounted for almost 80% of Bitcoin trading and took over the market for BTC-USD trading.
  • Bitcoin derivatives have seen more active participation and many newcomers in 2019.

Future Predictions for crypto derivatives trading

  • In 2020, the total volume of derivatives trading is expected to rise twice the amount of spot trading. It is also predicted that the competition will be intense like never before, and cryptocurrency derivatives exchanges can bring in more investors.
  • In 2019, the rates of crypto futures trading surpassed the value of spot trading. And it is predicted that 2020 will be the year for crypto derivative trading!

To sum up,

Crypto derivatives definitely play a dominant role in crypto businesses, and the glorious future for crypto derivative trading platforms is crystal-clear! The demand is rapidly evolving with each passing day. And to sustain and shine through the wide-spread competitors, the best choice is to hire a team of experienced developers, if you’re looking to create your own crypto derivatives trading platform.

At Blockchain App Factory, we have a team of well-versed, qualified developers who will offer the most reliable cryptocurrency derivatives trading exchange with exclusive strategies that will scale up your business to new heights. Our platform is fully-featured, 100% secure, and customizable according to your preferences. To know more information about our services, get in touch with our team of experts!


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