Recovery in optimism? Crypto derivatives market is heating up

Source: The Block

Compilation: Shallot Blockchain

According to the latest data, the crypto derivatives market is heating up.

Bakkt launched a bitcoin futures product in September 2019. According to Skew's data, the product's trading volume exceeded $ 37 million, setting a record for 2020.

Rival Chicago Mercantile Exchange (CME Group) 's open bitcoin futures increased to $ 314 million, which also set a record in 2020. Product transaction volume reached $ 824 million.

To a certain extent, futures are an important risk management tool for institutional investors. The growth of the futures market may be a signal that the digital asset market is maturing.

In addition, Deribit, a crypto options and futures exchange, also set a record in 2020, with options products trading in excess of $ 200 million.

"The market is strong," said Skew founder Emmanuel Goh. "Many signs point to a renewed optimism."

Mood change

The activities of the options market are supported by similar activities in the spot market. According to The Block analyst Larry Cermak, the volume of legal spot transactions increased from $ 39.83 billion in December to $ 67.53 billion in January, an increase of 70% and a five-month high.

To be sure, as pointed out by Skew founder Emmanuel Goh, the market experienced a similar spike in transaction volume in the second half of 2019. At that time, the CME Group's trading volume on June 27 reached a record $ 1.725 billion. "The next thing to look at is whether this time is more sustainable," Goh said.

However, some other market observers have suggested that there are new signs of optimism compared to previous market rebounds.

For example, according to sources, many companies are seeking a new round of financing. Some token projects are interacting with powerful players in the technology and financial fields. On Tuesday, Reuters reported that JPMorgan Chase & Co. (JPM.N) is in talks to merge its blockchain division, Quorum, with Ethereum developer ConsenSys.

In the trading market, the founder of B2C2 Max Boonen said that he did not see too many selling orders, although the institution is not necessarily in the state of FOMO entry. Boonen said, "I feel that this rebound is more driven by the expectation of halving the bitcoin reward and the retail entry driven by the new crown virus panic."

As of now, Bitcoin is trading at $ 10,360, an increase of 27.8% from the previous month. At the same time, Ethereum was trading at $ 266.28, up 76.8% from the previous month.