Making Money, or in other words, creating assets has become quite easy with the rising popularity of cryptocurrency but with a risky proportion. And now that you are in the right place now, you will get a step-by-step guide on how to start buying and trading cryptos.
So, Let’s deep dive in the world of cryptocurrency and get the answers to the most common questions – What Are Crypto Derivatives
What are cryptocurrency derivatives?
With regards to the cryptocurrency market, derivatives are contracts signed by two or more parties to buy or sell a certain cryptocurrency asset for a set price in the future. Any changes experienced in the cost of the asset will have a direct influence over the value of the contract.
Is crypto derivatives trading a good way to protect against price fluctuations?
However, recent news reflects that crypto derivatives trading receives a soaring interest from the public to protect themselves from price fluctuations. For example, the monthly trading volume reached $602 billion in May 2020, making it one of the highest-record for crypto derivatives trading.
How big is the crypto derivatives market?
The crypto derivatives market has exploded over the past couple of years, ever since the CME (Chicago Mercantile Exchange) and CBOE (Chicago Boards Options Exchange) launched Bitcoin Futures in 2017. According to recent reports by CoinMarketCap, Binance recorded a massive crypto derivatives volume of $42 billion.
What are the risks of crypto derivatives?
The use of derivatives in the crypto space is not regulated, and this alone portends risks. Crypto derivatives face the challenge of volatility. The rise and fall of prices can happen at any time without any prior warning, which makes the crypto economy one big risk for investors.