Crypto-Derivatives Volume Reaches $602 Billion Mark in May, Report States

Crypto-Derivatives Volume Reaches $602 Billion Mark in May, Report States

The crypto derivative activity soared in May and registered an all-time high, as per a report released by crypt data company CryptoCompare.

CryptoCompare says in a recently released May 2020 study that derivative volumes soared to $602 billion, a 32 percent leap. The research also stated key development channels.

As per the report, for May, Huobi, Binance, and OKEx represented at least 80 percent of all derivative activity in the sector. Of the three, Huobi came did come tops to reach $176 billion, leaping 29 percent from April. OKEx reached $156 billion and Binance, with $139 billion, came in third.

CryptoCompare as well provided that the latest halving of Bitcoin may have a great deal to do with this. Numerous traders and investors also had a good amount of extra derivative activity in anticipation of Bitcoin’s halving. The organization further said there was a large increase in the number of crypto options being traded in the study.

Deribit, options exchange had its options to increase volume by more than 100 percent back in May to $3.06 billion. A day before the Bitcoin’s halving, Deribit grabbed at $196 million worth in the highest 24-hour volume of trading since its inception four years ago.

Deribit reached a high of $1bn for the volume of Bitcoin options on May 19.
Chicago Mercantile Exchange (CME)
Cryptocompare reports that last month’s Bitcoin (BTC) derivatives saw huge increases in trading volume with institutional player Chicago Mercantile Exchange (CME) increasing quickest to $7.2 billion at 59 percent.

The volumes of institutional options on CME attained a monthly mark of 5,996 contracts, up 16-fold from April. The regulated exchange also set a new daily high on May 28,  with trades of 1,418 Bitcoin options contracts.

Derebit’s options volume increased in May to $3.06 billion by 109 percent.

CME’s futures contract has increased by 36% in May to 166,000 volumes.

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Binance Introduces Ethereum and XRP Contract Options

Binance Introduces Ethereum and XRP Contract Options

Large cryptocurrency exchange Binance announced the launch of options contracts for Ethereum and XRP. According to the announcement, Binance users will initially be able to access new products only through the Binance mobile app.

Last month, Binance announced the possibilities of Bitcoin for its users. With the new offer, ETH and XRP options are available for various durations. These include 24 hours, 8 hours, 1 hour, 30 minutes, and 10 minutes. Users have access only to contracts with a maximum order size of 200,000 XRP and 200 ETH.

At the beginning of the month, the volume of open contracts on options for bitcoins reached a new maximum. On March 7, the total value of bitcoin options exceeded $ 1 billion. According to the Skew crypto analyst platform, the main exchanges responsible for this feat are Bakkt, OKEx, CME, Deribit, and LedgerX. At that time, Deribit was the exchange with the largest number of open positions for a total of $ 903 million – almost 90%.

Recently, Bybt crypto trading platform rated BitMEX as the largest BTC for the futures market, and Binance as the second. At that time, BitMEX owned 33.64% of all oil production contracts worth more than $ 562 million. Binance accounted for 19.1% of OI contracts worth more than $ 319 million.

Currently, according to Bybt, both platforms are still at positions 1 and 2, although BitMEX has fallen to 33.13%, while Binance is now 17.84%.

Ethereum and XRP Options
Options are investment contracts that give traders the right — but not the obligation — to buy or sell an asset over a specified timeframe for a given price.

Ethereum and XRP options are instantly available on Binance.com, mobile users need to update their apps so they can access them.

“Options contract is a much-anticipated product that allows traders and miners to effectively purchase insurance in their positions and also allows speculators to take advantage of market movements,” said Changpeng Zhao, CEO of Binance, in a blog post.

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Deribit Crosses $1 Billion in Bitcoin Options Open Interest Historic High

Deribit Crosses $1 Billion in Bitcoin Options Open Interest Historic High

Crypto derivatives exchange Deribit, has seen a significant spike in the volume of open positions of Bitcoin on its platform. The exchange reached a new high of $1 billion on May 19, according to data from research and analytics company, Skew.

The latest creation is due to a combination of many variables, such as a large number of stakeholders, as per Deribit ‘s chief enforcement officer Luuk Strijiers:

“The current track is influenced by market optimism, an increasing number of wide and varied international players on Deribit and the efforts made by our multiple stakeholders and us to provide the maximum financial performance, credibility and connectivity and trading alternatives at all moments to a top-quality market.”

Deribit has seen a year-over-year growth trading options of 270 percent in 2020 alone. Last week the average volume of trading also approached $100 million, setting a new high for the last two months. The volume of daily trading also increased by 170 percent in 2020.

Deribit presently has derivative Bitcoin and Ether futures, worth more than $1.3 billion. Bitcoin options represent 74 percent of the total.

Deribit declared its intention, later in January, to transfer its base from Amsterdam. The firm said that it was compelled to do so because the Netherlands intended to introduce new EU rules which will have an impact on the business.

Growth and Trading Target
Open-interest growth is driven mainly by options that expire next month. More than 40,000 contracts that expire on June 26, 2020, are open as of Wednesday.

Options are often more complex than futures contracts since their price depends on some factors such as volatility, expiry time, risk-free interest rate, etc. Further, as expiry nears, options begin to lose appeal.

Futures contract pricing is much easier to understand. As a consequence, futures are much more widely known unlike options, and generally see the higher open interest. In the case of Deribit though, the activity of options is much higher.

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BitMEX Reveals Details Over Its Crypto Insurance Trust

BitMEX Reveals Details Over Its Crypto Insurance Trust

BitMEX states in its official blog post that on March 12 and 13 the exchange received numerous queries over the results of its insurance trust. It also defines what the insurance trust is, and why it is important.

BitMEX declared, contrary to public opinion:

This does not offset BitMEX operating expenses or add to BitMEX earnings, However, it is not used to deliberately or otherwise manipulate the markets.

The insurance Trust is in place to try to avoid Auto Deleveraging (ADL), the firm claims. That’s where competitive traders ‘ assets are deleveraged toward liquidated assets to escape bankruptcy. Throughout the 12 and 13 March “unimaginable uncertainty,” by attempting to avoid ADL, the fund served as “the last point of call.”

The Insurance Trust exists to act as a last point of call to prevent ADL, notwithstanding the severe price action, ADL was effectively prevented on 12 and 13 March.

BitMEX as well states that, just as with conventional exchanges, its traders never end up owing more than the margin posted kudos to its fund’s size and efforts.

The statement goes on to outline conditions that traders must take into account while using the exchange, like the price of bankruptcy and the price of liquidation, and when the liquidation engine takes over. Eighty percent of the comment is concerned with the liquidation procedure. You should possibly only proceed to the section many people are interested in reading:

What Is the Performance of the Engine Liquidation and Insurance Trust as of March 12 and 13?
The consensus is that BitMEX experienced a rippling margin call that compelled traders out throughout the phase and sent BTC nosediving.

BitMEX after which stopped working due to hardware problems and some 30 minutes later the price as attempting to recover.

It was very well known by the exchange stating that during this period:

The trading algorithm unwounded this position on the market at rates that slowly became more volatile (lower) as the long position expanded and its holding period progressed.

At this time, the trading operation of the Liquidation Engine recognized substantial losses, crystallized as insurance fund drawdowns.

The exchange, nevertheless, will not justify how this led to their hardware problems. Moreover, a further aspect BitMEX never seems to have reacted too well is how the insurance fund sustained such a small loss, as it did make money.

The new post reads:

The highest downturn on March 13 was 2,606 XBT.

Today’s BitMEX Insurance Trust sits at 35,028.2986 XBT. Since, whilst the company insists, the Trust does not act as a source of gains for the company or has any impact on the market, how did instance funds such as Deribit take such a pummeling whereas BitMEX appeared virtually untouched?

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Bitcoin Options Volumes Record $60 Million On Deribit

Bitcoin Options Volumes Record $60 Million On Deribit

Trading volatility has been shrinking for a while now as a result of recent capitulation in the crypto market, which appeared to have made the value of Bitcoin to depreciate by the day. Recording a daily low of $8400, Bitcoin is struggling around the $8500 at the moment. Meanwhile, the market scenario is causing a FUD – Fear Uncertainty and Doubt amongst holders. Furthermore, the recent drop in Bitcoin’s price was led by panic selling in the market which is likely to continue if Bitcoin continues to fall.

Compared to the previous days of trading, Bitcoin’s volume has seriously subdued to around $21.5 billion at the moment. More so, the entire crypto market cap is now trading under $153.2 billion. Apart from today, Bitcoin’s trading volume has been quite minimal in percentage.

Bitcoins-Price-Index

According to a crypto derivatives market analysis, SKEW, Bitcoin options volumes reached a daily high of $60.1 million on Deribit Exchange a few hours ago with a minimum volume of $2.0 million, maximum of $69.3 and an average of $28.6.

Could this be a sign of an incoming bull rally for Bitcoin?

Well, we will get to know that in the next couple of days. However, the current selling pressure is still setting a serious panic in the entire crypto space, although Bitcoin may give light if we start to see a substantial increase in the trading volume

If we look at Bitcoin’s trading volumes across major Bitcoin options Exchanges such as Binance, Bitmex, Kucoin, Cex.io,  amongst others, we would observe that the volumes are quite low as traders and investors stay on hold as Bitcoin’s next move is uncertain.

In my own opinion, selling BTC at the moment could be a nice spot for short-traders as the current price drops may become heavy in the next couple of days. At the same time, traders might want to maintain a neutral position for now in order to wait for a good and perfect entry.

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