Bitcoin’s Volatility May Be Reduced Due to the Derivatives Market for the Long-Term

It is important to look at the crypto-based derivatives market when we talk about Bitcoin (BTC). This year, several new companies such as the Intercontinental Exchange’s Bakkt have entered the game and started to plant the seeds for a future in which Bitcoin derivatives will be a major force in the market.

The volumes of derivatives markets are growing up recently. Looking at the perpetual swaps done on BitMEX, for instance, we can see that 2,363 perpetual swaps were done last year and that this year we have seen 2,681 of them, with around 40 days until the end of the year. This is a major growth.

This has led some experts to believe that the derivatives market will have a major impact on the industry, especially when it comes to reducing the volatility that plagues the Bitcoin industry.

Before the derivatives market got so important, most exchanges derived prices in spot trading from larger exchanges which had a higher volume. Even though they did this, not all markets were necessarily highly liquid. Now, however, the growth of derivatives markets, which are more liquid, is set to influence prices.

The more liquidity a market has, the less volatility it will have. Part of the reason why Bitcoin went up and down so quickly was that it is still a small market because it was not so popular yet. Now, the market is more diversified and sophisticated than ever and the volatility will probably be affected by these trends.

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Author: Rebecca Asseh

dYdX Intends on Stopping Support for 0x Decentralized Exchange Markets

dydx, a non-custodial exchange based out of Ethereum blockchain which allows for derivatives and short selling may end its support for 0x protocol based markets. The main reason for the discontinuation of 0x is the success of ETH/Dai.

0x protocol is also a decentralized exchange protocol on the Ethereum’s network, but it seems liquidity has been a growing problem and dydx believe ETH/DAI resolved the liquidity issue quite fast and because of that they might shift their focus only towards that.

Zhuoxun Yin, head of operations at dydx said that the 0x protocol based market would be discontinued after 0x transitions to the third version of its protocol. He said, “We’ve been able to build meaningful liquidity on our markets so far, quite quickly, ”

Matteo Leibowitz, a market researcher for block analyzed dydx and its progress over the last three quarters and noted that dydx registered a volume of $60 million in the second quarter of 2019 which rose to $70 million in the third quarter and the number is expected to grow even further in the last quarter.

Although 0x markets would be discontinued after its switches to version 3, the new update would bring in several infrastructural updates as well as a new version of its token ZRX.

Leibowitz also presented the new updates coming to the 0x protocol stating,

“in 0x v3, traders using the 0x protocol must pay a fee to market makers, distributed pro-rata according to ZRX staked, equal to the transaction gas fee. This updated model is intended to attract more market liquidity, with the explicit user fee offset by tighter spreads. However, dYdX is confident that it can attract liquidity without burdening users with additional fees.”

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Author: Silvia A

FTX Derivatives Exchange Rolls Out Futures On Index of 8 Popular Chinese Cryptos

Derivatives exchange FTX has announced the launching of an index of 8 common Chinese-based cryptos, CoinDesk reports.

The announcement was made by the company’s CEO Sam Bankman-Fried on Tuesday through a tweet. The Dragon Perpetual Futures Index (DRGN-PERP) will track some of the most popular coins comprising of BTM, IOST, NEO, NULS, ONT, QTUM, TRX, and VET and will be on the basis of their weighted average of their market prices.

The company is also exposing traders to the coins based on the index for perpetual futures contracts. According to the CEO traders will be offered a chance to leverage such contracts more than times.

The Antigua and Barbuda based exchange, is known for offering less familiar indices after they launched the Shitcoin Perpetual Futures Index a few months ago. The offering covers about 58 low market cap coins.

Amazingly, the timing of the launching of DRGN-PERP somes just days after the Chinese President Xi Jinping told his country to take advantage of the blockchain technology and use it in various sectors within the economy.

Xi’s comments led to a sudden surge in tech stocks and blockchain in China, resulting in the government authorities to caution investors against speculative behaviors.

Bankman-Fried also explained that the support of the blockchain industry had led to prices of various cryptos developed in the country to surge and enhancing massive user interest in Chinese based crypto projects.

In the past, Chinese officials have been cracking down on cryptocurrency based projects going to an extent of banning different exchanges from operating in the country. The crackdown has led to different crypto exchanges fleeing the country to more crypto-friendly nations and consequently reducing user interest in cryptos.

However, the Chinese government seems to have softened its harsh stand on cryptos after reports were released on central bank’s development of a digital currency.

Although its still early to predict whether Xi’s comments will have any major impact in the Chinese crypto industry, such bold moves like the DRGN-PERP, suggest there could be some positives to write home about.

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Author: Joseph Kibe

Vega Protocol Gets $5 Million Led By Pantera Capital for Derivatives (Options, Swaps, Futures) Market

A company focused on the creation of a decentralized derivatives market called Vega Protocol was recently able to raise $5 million USD via it’s seed round. According to the official reports, the round was led by Pantera Capital, one of the largest crypto funds in the market. Other important investors were Ripple’s Xpring, KR1 and Hashed.

The goal of Vega Protocol is to create a platform in which people can trade in the derivative markets all around the world. The derivatives include swaps, futures, options and other investments.

According to the founder of the Vega Protocol, Barney Mannerings, there is a lot of value to be discovered on this platform. He also confirmed that the company would release more details about it’s token soon to explain how it would work.

Vega will work as a non-custodial layer 2 solutions. It is an ambitious project, but not properly an exchange, its founder affirmed, only a platform that will connect people who are interested in this market.

Mannerings also talked about how Vega is around 10 to 100 times faster than Ethereum. It is a newer network that uses better technology, so the results are pretty clear. He intends to create a platform in which people can create basically any kind of derivative product using it.

Many securities and other investments will be digitized in the future, so there is a lot of hype around this kind of project. Paul Veradittakit from Pantera Capital affirmed that the team has a good vision of the future. According to him, projects like this are integral to the development of the blockchain ethos and they represent what the company also believes.

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Author: Hank Klinger

Seed CX Has Started Testing Physically-Settled Swap Contracts With Bitcoin

Seed CX, a Bitcoin (BTC) derivatives firm, has recently decided to start the tests with its new margin swap products. According to the company’s press release, the matching platform os swapping products can already be tested by the clients via the Seed SEF platform.

The CEO of Seed CX, Edward Woodford, affirmed that this initial period of testing will be used in order to allow people to get in touch with the offerings and determine what is working or not to deliver a great product later. He affirms that the product will probably be officially launched within the next three months.

From the technological point of view, the company is ready for the launch and only requires the predicted time for testing. The only possible reason for delays can be regulators, which can be considerably more unpredictable.

Brian Liston, the president of the crypto derivatives company, affirmed that all Bitcoin of the new platform will be physically-settled and that the company is pretty excited to have such an interesting offering for investors. According to him, these are the final steps in order to get the product ready and out of the door, but some more beta testing is required first.

Seed CX Will Have Competition

Seed CX may be getting its products ready, but the company is far from being the only one to do it. Several other companies are focusing on the same niche. Blade (which was backed by Coinbase), ErisX and LedgerX are all getting ready to offer similar products.

Most of them are still getting services ready, too, so the ones to take the lead will probably get an edge on the competition.

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Author: Gabriel Machado

Crypto Derivatives Exchange FTX Releases “Shitcoin Futures Index” For Traders to Short Altcoins

Crypto-Derivatives-Exchange-FTX-Releases-Shitcoin-Futures-Index-For-Traders-to-Short-Altcoins

FTX, a crypto derivatives platform, has started to offer a very curious new product recently. The company has created a speculative index fund called SHIT-PERP: Shitcoin Index Perpetual Futures. That’s right, people, futures for the so-called shitcoins.

The idea is to index a total of 58 altcoins which are pretty badly placed in the market. It has a lot of projects which are not very well-known and some projects which are more famous such as Grin, Waves and Nano. Now, SHIT-PERP will join MID-PERP and ALT-PERP, two other low-cap indexes which are present in the site.

FTX is actually a somewhat new exchange. It was originally incubated during the Alameda Research program and it launched this year. The platform provides an over the counter (OTC) desk, indexes, futures and spot trading. Now, the platform is also offering options for traders who are interested in margin trading and spot trading as well.

According to the company, its connection with Alameda Research also helps it to have more liquidity than other companies in the market. Alameda, which was created in 2017, currently managed over $100 million USD worth of assets.

The team also affirmed that it was FTX that helped the company to get some important employees on board, such as people who worked on Google, Facebook, Jane Street, Susquehanna and Optiver.

Interacting With The Market In New Ways

Darren Wong, the CMO of FTX, was recently interviewed by Coindesk. He affirmed that the index of bad coins is important because it can give people new ways to interact with the market.

According to Wong, there are at least three examples of how someone could use the shitcoin index in order to make profits. For instance, the person could get exposure to an Initial Coin Offering (ICO) without needing to be exposed to the general industry. This way, the person could short the market and hedge bets while limiting the downsides.

Another way is to short the altcoin market in general since there are not a lot of ways to do that. Finally, the third way is to buy from the three indexes in case you think that BTC dominance is too high and will go down soon, this way, you profit when dominance goes down.

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Author: Gabriel Machado

BitMEX, Refinitiv and CryptoCompare to Collectively Create Real-Time Crypto Futures Metrics

BitMEX, Refinitiv and CryptoCompare to Collectively Create Real-Time Crypto Futures Metrics

BitMEX, known as a crypto derivatives platform, is set to unite with CryptoCompare to create a real-time crypto futures dataset. The companies are ready to create this product for new investors and to use the technology of Refinitiv, which is providing the base platform, together.

After the integration with Refinitiv Eikon (a set of software products focused on professionals who want to monitor markets in order to get the best results), the product is being set to make crypto markets more transparent.

The CEO of BitMEX Arthur Hayes is heading the initiative, which he believes that will be important in order to secure greater participation from institutional investors in the crypto world.

According to him, making good trading decisions depends heavily on solid data. If the investors do not have this kind of insight, they will often avoid these markets as they are seen as riskier than the other ones.

With the help of the new product, however, the company will be able to cater to this kind of investor better and will give them the confidence that they will need in order to be participants in this market.

CryptoCompare is another company which has a long-time interest in catering to this kind of investor offering data. They made a partnership with Thomson Reuters last year in order to provide an order book for 50 cryptos on the Refinitiv Eikon platform, of which the company was already a partner before this latest project was started.

The founder of CEO of CryptoCompare, Charles Hayter, has affirmed that the crypto market is ready to mature now and this will certainly bring all kinds of new investors, especially the institutional ones, which are often seeing as the most interesting type because they trade in large sums.

[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.

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Author: Gabriel M