In 2019, the volume of OKEx futures was 2.24 times the volume of spot trading; there were 238 days of BitMEX trading volume reaching more than double that of Binance, and only eight days of Binance spot trading volume exceeded BitMEX, the agency said in its 2019 Cryptocurrency Derivatives Exchange Industry Annual Report.
If the spot market continues to be slow, the total volume of derivatives trading on the market in 2020 can be expected to rise to more than twice the amount of spot trading
The competition in derivatives products will be more intense, giving each exchange the ability to get more investors.
Bitcoin futures trading was launched at the height of the crypto bull market in December 2017 by the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) The move has been a huge milestone for the entire crypto industry, as a futures contract enables investors to hedge bets and lower the risk of the unknown, which is quite important to cryptocurrencies. In other words, the trading of Bitcoin and crypto futures helps large traders to reduce their risks by signing a contract that settles directly on a given cryptocurrency’s underlying auction price.
In addition, obviously there are many traders who want to profit from those drastic changes by trading Bitcoin derivative contracts and big crypto. The dealer will purchase a cryptocurrency at a low price to make a profit from a sudden change in the price of the underlying asset and then sell it at a higher price later. However, this strategy is only relevant during a bull market and, like all other attempts speculating on the price of the underlying asset, is quite risky.
Another strategy is a way of profiting from even a market for crypto bears or a market that is currently experiencing a downtrend. In short, the traders usually borrow a third party’s assets— whether it’s an exchange or a broker— and sell them on the market when they expect the price to fall. As the price of the coin goes down, the trader buys back the same amount of assets for a lower price and profits from the price movement, while a commission is paid out to the exchange or broker.