According to British digital asset derivatives data analytics firm, Skew, the new asset classes’ derivatives market has grown. Data taken from exchanges who offer cryptocurrency based futures contracts reveals that the value of daily trading volumes stands at about $5 billion, daily. The popularity of crypto futures trading markets has risen so significantly, that it has begun to syphon a good amount of value from spot trading markets.
This year has seen a shift in the digital asset trading landscape, on the back of a flourishing futures market. Futures contracts offer traders an opportunity to place bets on the price movements of digital currencies without actually having to risk their own digital asset holdings. Derivatives trading appears to be a preferred point of entry into the cryptocurrency trading sphere for traditional traders , as contracts are usually cash settled. This trading mechanism, however, doesn’t necessarily reflect the spot market’s demand for actual Bitcoin – though whales can still try to influence spot market prices by performing spot trades on the side.
The spot market still dominates, with daily trading volumes valued at around $18 billion, but the futures game has been experiencing daily growth. The ICE’s Bakkt Bitcoin futures exchange has been logging a number of all time highs in the daily trading volumes department, of late. Bakkt contract trading volumes tend to fluctuate from day-to-day however, perhaps indicating that traders take a more cautious approach during times of high spot market volatility.
“Bitcoin Futures market trading at least $5bln on a daily basis pic.twitter.com/lSovIZDQrR” — tweeted Skew (@skewdotcom) November 28, 2019
Skew’s data is drawn from futures exchanges, CME, OKex, and Bitmex’s perpetual swaps (which are cash settled), as well as physically delivered Bitcoin futures markets on Binance JEX, and famed, Bakkt among others.
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