{"id":2468,"date":"2020-06-08T10:34:20","date_gmt":"2020-06-08T05:04:20","guid":{"rendered":"https:\/\/blockchainappfactory.com\/blog\/?p=2468"},"modified":"2020-07-29T11:47:11","modified_gmt":"2020-07-29T06:17:11","slug":"crypto-derivative-trading-platforms","status":"publish","type":"post","link":"https:\/\/www.blockchainappfactory.com\/blog\/crypto-derivative-trading-platforms\/","title":{"rendered":"A Brief analysis and enlightenment on crypto derivatives!"},"content":{"rendered":"

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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.<\/span><\/p>\n

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\u2019s take a quick glance at what they mean.<\/span><\/p>\n

What are crypto derivatives?<\/span><\/strong><\/h2>\n

In standard terms, a \u201cderivative\u201d is a financial contract between two parties based on an underlying asset\u2019s future price. Derivatives do not contain a value of their own. The name itself implies that it \u201cderives \u201c value from another asset. In the case of cryptocurrency derivatives, the value is derived from the price of cryptocurrencies.<\/span><\/p>\n

There are three primary forms of derivatives such as,<\/strong><\/span><\/p>\n

SWAP<\/strong> – 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.<\/span><\/p>\n

FUTURES<\/strong> – 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.<\/span><\/p>\n

OPTIONS<\/strong> – Here, the buyer or seller has a right and not an obligation, to buy or sell at a predetermined price, by a specific timeline.<\/span><\/p>\n

Now, let\u2019s take a look at some interesting numbers divulging the evolution of crypto derivative trading platforms over the years, and future predictions!<\/span><\/p>\n

Evolution of crypto derivative trading platforms<\/strong><\/span><\/p>\n

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.<\/span><\/p>\n