Monday, February 8, 2021

Bitcoin Futures Crosses $14 Billion Mark for the First Time

The total value of all Bitcoin (BTC) futures contracts in the global cryptocurrency market reached a new significant level of $14 billion on February 6, according to the Skew analytical resource.

The new record was set following the recent Bitcoin rally towards the $41,000 mark. Binance, the largest exchange by trading volume, accounted for the most BTC futures. Almost half of all currently unclosed Bitcoin futures contracts are traded on this site.

Binance also became the leader in terms of open interest in BTC derivatives. The total value of such contracts was $2.33 billion.

The second place after Binance was occupied by the OKEx exchange with a result of $2.21 billion. The third place was taken by the Chicago Mercantile Exchange (CME) with an indicator of $2.05 billion.

Recall that a futures contract gives its owner the right to buy the underlying asset at a predetermined price at a certain point in the future. Unlike option contracts, the holder of the contract is obliged to execute it, no matter how the outcome of the market.

On the horizon — $1.5 trillion

The optimism of futures traders is understandable as the past week was very successful for the cryptocurrency market. On Friday, February 5, Ethereum (ETH) skyrocketed to $1,752.05, having risen in price since the beginning of the week by 18 +%.

In addition, the market capitalization of ETH for the first time in its history rose to $200 billion. This allowed the second largest cryptocurrency by market capitalization to bypass such traditional heavyweights of Wall Street such as Wells Fargo, Morgan Stanley, and American Express.

At the time of writing, the total capitalization of BTC and ETH is now over $1 trillion, which is equal to about 80% of the total cryptocurrency market capitalization. Some participants in the crypto space have already started talking about the fact that a new milestone of $1.5 trillion is not far off.

Such predictions may well come true if cryptocurrency derivatives continue to gain popularity. Thus, the total trading volume of all derivatives on Binance has already reached a record value of $40 billion. These volumes include 147 different crypto assets.

Moreover, new derivative products are constantly emerging. Recently, BitMEX announced the launch of a perpetual swap on  Dogecoin (DOGE) with leverage of 20x. We can expect more to come from DOGE if Elon Musk plays his role as honorary CEO.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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