- The number of options available to Bitcoin traders keeps on multiplying.
- In both the retail and institutional markets, the range of Bitcoin products available has mushroomed, with derivatives exchanges competing to woo traders with new options, lower margin rates, and an expanded range of contract types.
Bybit is the latest exchange to get in on the act, launching USDT perpetual contracts for BTC, EOS, ETH, and XRP. With USDT serving as the quote and settlement currency, users of the Singapore-headquartered derivatives exchange will be able to maintain long and short positions simultaneously.
For example, they could hold a long Bitcoin position with high leverage and a bitcoin short with low leverage, with different timeframes for each. As a result of introducing tether (USDT) perpetual contracts, traders will be able to reconcile all profits, losses, and account balances using a single stable currency.
More Options for Bitcoin Options Traders
Bybit isn’t alone in adding new ways for traders to gain exposure to the movements of bitcoin and other leading cryptocurrencies. Binance has added the ability for traders of its Futures platform to use BTC as cross-collateral, while little-known Gibraltar derivatives exchange Quedex has just added the longest bitcoin options in the industry. Its BTCUSD contract, which launched earlier this month, doesn’t expire until December 2021.
Several futures exchanges have posted record volumes in recent weeks, as interest in derivatives products has been bolstered by a spike in bitcoin volatility. Bybit’s monthly volume has been creeping up, and now averages more than $1 billion a day, while Binance Futures just overtook BitMEX for trading volume. OKEx has also been making gains.
Bitcoin Open Interest Reaches Yearly Low
On March 23, the put/call open interest ratio for bitcoin options hit a one-year low of 43%, having peaked last June when the PlusToken scam propelled BTC to above $13K. The volatility that has affected crypto markets this month, on account of freak global events, resulted in the most extreme single-day movement bitcoin had seen in eight years. The market crash and subsequent partial recovery has proven a boon to Tether, however.
The stablecoin, which has a market cap of $4.66 billion, has seen heightened demand as traders have sought a hedge where they can store their value until the worst of the volatility has died down. While USDT’s utility has increased, including its introduction into Bybit’s perpetual futures contracts, other fiat-backed stablecoins have seen their volume soar. Chief among this month’s winners is USDC, whose market cap has almost doubled. Despite uncertainty over where the global markets will go from here, major investors remain bullish on bitcoin, with Michael Novogratz insisting “This will be and needs to be BTC’s year.”
The Galaxy Digital founder is not alone in believing that the current economic climate, as central banks ramp up the printing presses, was made for bitcoin to thrive. In a time when the U.S. is considering minting two $1 trillion coins with no debt, Bitcoin’s fixed and certain supply stands out, making it an attractive proposition to traders and savers alike.
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