Cryptocurrency Futures and Derivatives: A Growing Market

Explore the rapidly expanding world of crypto futures and derivatives, and learn about their impact on the digital asset market.

Jun 22, 2023

Key Takeaways:

  • Trading activity in crypto futures and derivatives has significantly grown in recent months.
  • Derivatives trading now represents a large portion of the entire cryptocurrency market.
  • Factors driving the growth of crypto futures and derivatives include increased speculation and more sophisticated trading strategies.
  • Due diligence and research are essential when assessing the potential risks and rewards of trading in these markets.


The cryptocurrency market has experienced massive growth over the past few years, and with that growth has come a corresponding increase in the popularity of trading strategies involving crypto futures and derivatives. These financial instruments, which allow traders to speculate on the future price movements of cryptocurrencies without actually owning the underlying assets, have quickly become a significant part of the overall digital asset trading landscape.

In this article, we delve into the world of crypto futures and derivatives, examining contributing factors to their rapid growth and highlighting the key players in this emerging market. We also discuss some of the potential risks associated with trading these complex financial instruments and the importance of conducting thorough research and due diligence before entering the fray.

The Surge in Crypto Futures and Derivatives Trading

Crypto futures and derivatives have seen a remarkable surge in trading activity in recent months. According to data from CryptoCompare, derivatives volume in January was up 76.1% from December, reaching US$2.04 trillion — the largest percentage increase since January 2021, when volume rose by 114%.

The rise in trading activity has been accompanied by significant gains for the world’s largest cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), which saw increases of 40% and 32%, respectively, in January. CryptoCompare’s report suggests that this growth was driven primarily by speculation in the derivatives market, rather than spot market accumulation.

Derivatives now represent 70.3% of the entire cryptocurrency market, up from 68% in December, further highlighting the growing popularity of these trading instruments.

Factors Driving the Growth of Crypto Futures and Derivatives

There are several key factors contributing to the rapid growth of crypto futures and derivatives trading. One significant driver is the increasing sophistication of cryptocurrency traders, who are seeking more advanced trading strategies and tools to capitalise on market opportunities.

Additionally, the growing interest in decentralised finance (DeFi) has led to the development of more complex financial products, such as options and perpetual swaps, which have further fuelled the growth of the crypto derivatives market.

Finally, the overall bullish sentiment in the cryptocurrency market, as well as the increasing acceptance of digital assets by institutional financiers, has contributed to the rising demand for futures and derivatives trading.

Risks and Challenges in Crypto Futures and Derivatives Trading

While the growth of crypto futures and derivatives presents exciting opportunities for traders, it’s essential to be aware of the potential risks and challenges associated with these markets. For one, the high levels of leverage offered by some exchanges can lead to losses if the market moves against a trader’s position.

Moreover, the complexity of these financial instruments can make them difficult to understand, particularly for less experienced traders. This underscores the importance of conducting thorough research and due diligence before entering the crypto futures and derivatives market.

Learn more about trading derivatives in our University article Introduction to Crypto Derivatives, Options, and Futures.


The world of crypto futures and derivatives is growing rapidly, offering traders new and exciting opportunities to capitalise on the ever-evolving digital asset market. As these markets continue to expand and mature, it’s essential for traders to stay informed and conduct thorough research and due diligence to ensure they’re making well-informed decisions when engaging in this complex form of trading.

Trade derivatives on the Exchange — available depending on jurisdiction.

Due Diligence and Do Your Own Research

All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, cybersecurity, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by to invest, buy, or sell any coins, tokens, or other crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.

Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.






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