A cryptocurrency exchange is the place where there is buying or selling of crypto derivatives contracts. A derivative actually is financial contract between two or more parties that derives its value from an underlying asset that can be stock, bond or a piece of asset. In this case the underlying asset is the cryptocurrency. Cryptocurrency can be of various forms and all of them can be traded on the cryptocurrency exchange as crypto derivatives. Binance is the world’s largest cryptocurrency exchange and has planned to enter into the future market by acquisition of a small derivative platform.
Image Source: coindesk.com
Binance will offer derivative products, including futures, options, and perpetual contracts, according to the latest developments. For its part, Binance has been working on its own platform internally. Over the next couple of weeks, Binance will allow its clients to trade on both the JEX platform as well as the one it developed to get a sense of which is superior. The cryptocurrency exchange also has developed bitcoin perpetual swap according to the latest newspaper documents filed by the cryptocurrency exchange. Binance is entering one of the most heated markets in the cryptocurrency trading space. Established brands in the derivatives market such as Deribit and BitMEX have seen their volumes continue to grow in recent months, with BitMEX’s insurance fund up by 50% since the beginning of 2019 to over 31,300 BTC. Meanwhile, Deribit dominates around 95% of the total cryptocurrency options market. CoinFLEX, which specializes in physically settled futures contracts, recently raised $10 million and launched a market-making incentive program to boost its market share.
Image source: theblockcrypto.com
In an interview given by the CEO of Binance crypto derivatives firm said to a journalist that huge customer base on spot and margin trading will help the Crypto derivatives firm to build initial liquidity than other competitors which according to him is the most important part of the starting up an exchange.
Source: The Block
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