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Author: Admin | 2025-04-28
We’ve just released CoinGecko Derivatives earlier, and we’re completing the circle now with CoinGecko’s Beginner Guide to Crypto Derivatives! This is a guide intended for beginners, and if you are unfamiliar with what derivatives are, this will give you a bird’s eye view on the entire scene to get you started!Everyone is talking about…Crypto Derivatives?It’s the talk of the town right now, but why all the hooha? Let’s explore it with a little bit of data!BitMEX trading volume, 5 Aug - 29 Oct 2019BitMEX’s perpetual futures trading volume in comparison on 29 Oct 2019At the time of writing (October 2019), the most popular derivative exchange is BitMEX, peaking out at a daily trading volume of approximately $11.5 billion in late October. Web traffic wise, SimilarWeb estimates that BitMEX averaged nearly 11 million visits per month since August 2019, which is likely enough to make them a top-10 cryptocurrency website.In addition to BitMEX, several other exchanges such as Binance, Kraken, Huobi, and OKEx are also offering derivative products. You can be sure that it is not at a one-off occurrence - derivatives are thriving based on the data that we are seeing. In our Q3 Cryptocurrency Report released earlier this month, we noted that CoinGecko only had 6 derivative exchanges by 1st July 2019. Fast forward to 29th October 2019, we now have 22 derivative exchanges with a recorded 24 hours volume of $19.4 billion ($0.88 billion per exchange). For an emerging market segment, this is nonetheless impressive especially when compared to the more mature spot market which recorded $67.9 billion across 370 exchanges in 24 hours ($0.18 billion per exchange).Numbers aside, there are also real, practical reasons to why derivative contracts are popular but we’ll go through those after we’ve explained derivatives to you!What are Derivatives?How we felt exploring the world of crypto derivatives. (Image Source)By definition, derivatives refers to financial instruments (contracts) whose values are derived from an underlying asset (eg. bitcoin, gold, potatoes). When someone trades derivatives, they are essentially buying/selling contracts that represent the actual asset.Derivatives also exist in traditional financial markets since many years ago. For
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