Crypto Derivative Market Overview 2021

Welcome to the first article of our crypto derivative series. This article will give you an overview of the crypto derivative markets.

Welcome to the first article of our crypto derivative series. This article will give you an overview of the crypto derivative markets.

Key Takeaways

• Crypto derivatives reached a milestone in 2017 when CME and CBOE launch Bitcoin futures. And now it accelerates to enter the next rise.
  
• For both BTC and ETH, their derivatives markets dominate their spot markets, and their derivatives volume is around five times larger than their spot volume.
  
• Bitcoin and Ether are the most common underlying assets, given that their futures volume accounts for around 80% of the total future trading volume.
  
• The benefits of crypto derivatives are cash settlement, crypto short, and margin trading.
  
• Institutional investors actively joined derivatives markets in the 4Q 2020, supported by the surge of CME trading volume.
  
• Futures are the largest traded derivatives, and perpetual swap – an innovative type of futures – dominates the overall futures trading.
  
• DeFi has a very small proportion in the crypto derivatives markets.
  
• Crypto derivatives inherit the risks from traditional derivatives and crypto markets, namely: liquidity risk, asset risk, exchange risk, and regulatory risk.
  

Read the full version of the Crypto Derivative Market Overview here.