5 ways derivatives could change the cryptocurrency sector in 2022
Retail and institutional investors love derivatives instruments. Here‘s how they could impact crypto markets in 2022. We‘ve all heard stories of billion-dollar future contracts liquidations being the cause of 25% intraday price crashes in Bitcoin (BTC) and Ether (ETH) but the truth is, the industry has been plagued by 100x leverage instruments since BitMEX launched its perpetual futures contract in May 2016.The derivatives industry goes far beyond these retail-driven instruments, as institutional clients, mutual funds, market makers and professional traders can benefit from using the....
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Bitcoin could change derivatives, in particular settlement, trading and securities issuance according to some individuals, among whom are bankers and technologists. Alex Batlin, who has been a vocal supporter of banks adopting Bitcoin related technologies, told attendees of the IDX Derivatives Expo in London that blockchain technologies will change banking. "Blockchain technologies can make banks more efficient - for example through instantaneous settlement rather than the days it takes at present, lower costs and lower operational risk," according to Alex Batlin, chief technology officer....
The US Securities and Exchange Commission (SEC) will enhance the regulatory framework for derivatives use by registered investment companies after passing a vote to either change or amend existing rules. As part of the new framework–which covers mutual funds, exchange-traded funds (ETFs), and closed-end funds–operators must undertake to implement a written derivatives risk management program. A Modern Approach to Derivatives Regulation The rule changes, which open the doors for more leveraged ETFs, will also permit a fund to enter into reverse repurchase agreements and similar....
For years, the cryptocurrency industry has had a complicated relationship with regulators. An example of regulatory pushback within the crypto space was when Facebook-backed Diem tried to launch its stablecoin. Regulatory limitations have undoubtedly had an impact on derivative brokers and exchanges. Just recently, Binance, one of the biggest exchanges, was forced to shut down crypto derivatives in several countries, including Germany, Italy, and Hong Kong. Since this announcement, derivatives traders have been on edge about what this means for the derivatives market and, most importantly,....
Crypto derivatives are now among the most common financial products on any cryptocurrency exchange or trading platform, thanks to increased interest among the trading community. Trading crypto derivatives has its own advantages as it allows users to mitigate volatility-associated risks and hedge against potential losses. There are various derivatives products that include Swaps, Futures, Forwards, […]
With the rise of derivatives trading, how do protocols ensure that retail investors are not going in blind? BTCWith an increase in the number of retail investors dabbling in derivatives trading and investors hopping into decentralized exchanges (DEXs) due to regulations in the United States and China, there has been a rise in users utilizing derivatives DEXs, with Bitcoin (BTC) whales moving into derivatives and an increase in buying interest in derivative contracts.This has created a surge in the daily trading volume for derivatives protocols, allowing them to briefly take over....