Analysis: Bitcoin derivatives market may reduce its long-term price fluctuations

A post published by TowerWatch said that the growing derivatives market will have a major impact on the cryptocurrency industry. Before the derivatives market is widely recognized, the exchange usually designs a spot price that will come from a larger, more volumed physical exchange. Prior to this, the liquidity of encrypted derivative contracts was not high. Therefore, the index is a sensible way to initiate margin calls without having to worry about manipulation. However, the growth of the futures market has led to the introduction of smaller physical exchanges with a cumulative trading volume of less than 10% of the total BTC trading volume in the industry. Therefore, speculative manipulation has become a way to get more profit from low-volume exchange trading. Therefore, the increased interest in the derivatives market is indirectly making the market more dependent on Bitcoin. The main reason for this is the liquidity around Bitcoin, as BTC derivatives are highly liquid and attract potential investors. The derivatives market has injected a certain degree of maturity into the BTC market, and this development is expected to ease long-term fluctuations around Bitcoin prices. However, short-term fluctuations may encounter greater turbulence due to increased leverage.