Asian Data Aggregator Expects “Strong Crypto Derivatives Growth”
Following the crypto derivatives market hitting a new high in September 2019, an Asian cryptocurrency data aggregator has announced that it is releasing a derivatives section as it expects this aspect of the crypto industry to grow stronger with time. The section will display aggregated metrics for crypto derivative products such as perpetual swaps and futures.
With the announcement coming after it claims BitMEX, the most popular crypto derivative exchange, reached nearly US$9 bln in daily trading volume last month, CoinGecko becomes the first data aggregator to provide information about crypto derivatives.
The aggregator aims to be “the most comprehensive database as this sector develops further” by providing its users with full access to three tools to view the Crypto Derivatives Market – Derivatives Product Overview; Derivatives Exchanges Overview; and Derivatives Exchanges Profile (e.g., BitMEX).
BitMex describes a futures contract as a derivative product that is an agreement to either physically or cash settle the buying or selling of a commodity, currency or other instrument at a predetermined price and at a specified time in the future. Such contracts do not require traders to post 100% of collateral as margin giving traders the opportunity to trade with leverage of up to 100x on some contracts. A perpetual contract, on the other hand, is also a derivative product similar to a traditional futures contract but with no expiry or settlement; mimics a margin-based spot market and hence trade close to the underlying reference Index Price (unlike futures contract which may trade at significantly different prices due to basis); and its primary mechanism to tether to spot price is funding.
The CEO of CoinGecko, T.M. Lee, says they have observed strong growth in the crypto derivatives market this year and, as a top crypto data aggregator, wants “to lead the industry with innovation” and hope “to empower traders with more data that they can use to make better-informed decisions.”
The derivatives section is to ensure users are able to browse more than 100 derivatives products offered by over 20 exchanges. It is to offer traders a “free, unimpeded access to vital aggregated crypto derivatives data such as price, open interest, basis, funding rates, expiry dates, trading volume, and more.”
The launch is also one of the steps toward adding further metrics to the growing derivatives market as CoinGecko expects to “see strong growth in crypto derivatives, with volume outpacing the spot market in the near future, mirroring the traditional commodities market”.
The Singapore-based crypto aggregator which recently partnered with a US digital asset venture consulting firm to launch the Maha-CoinGecko Digital Asset Index that will be available on Bloomberg, Nasdaq GIDS, and Thomson Reuters Eikon, plans to start tracking options as well as other derivatives offerings such as leveraged tokens offered by certain exchanges.
The metrics’ release coincides with Bakkt’s continuous effort to drive “the recognition that digital assets hold tremendous opportunity” with the announcement of the proposed launch of their consumer app. The Bakkt Bitcoin Futures on Friday October 25 set another trading record of 1,179 contracts just as it announced its Bitcoin options slated for launch in December. The consumer app will serve as a platform for users to manage their digital asset portfolio to either store, transact, trade or transfer their assets.