Derivatives in the Digital Asset Market

Bitcoin and other cryptocurrencies have been difficult to categorize since the creation of BTC over ten years ago. Many people believe that cryptocurrencies are independent of the traditional asset category. However, since inception, cryptocurrencies have proven capable of compensating for the traditional investment market’s shortcomings.

Because cryptocurrency as an asset category is still in an early development stage, the OTC market is dominated by fiat currency transactions and lending. Additionally, there are not as many OTC derivatives markets as there are traditional OTC markets. On the contrary, the cryptocurrency derivatives market is dominated by exchange transactions. Futures currently constitute the highest volume, followed by perpetual swaps. Options trading has also begun to develop rapidly over the past year and continues to grow in popularity.

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