Who wins the race in the futures market cryptocurrency?
Who wins the race in the futures market cryptocurrency?
Bitcoin has been around for more than 10 years, but during this time the cryptocurrency markets have remained largely distant from the wider financial markets. This changed at the end of 2017, when the Chicago Mercantile Exchange (CME) and Chicago Stock Exchange (CBOE) launched the first regulated Bitcoin futures for institutional investors. Even though the bear market is cryptocurrency in 2018, both exchanges reported a 41% increase in trading in these futures between the second and third quarters. This level of investor interest has attracted many cryptocurrency exchanges to the derivatives market.
Traditional sites and cryptobearches
Both the CME and CBOE offer settlement futures contracts for bitcoins, which are fully regulated by the US Futures Trading Commission. Nevertheless, trading here can be difficult for an ordinary trader. In addition to the normal account registration process, users must show that they have established a relationship with an approved clearing house, i.e. a bank. Private traders are better suited to trading on other exchanges. They can be accessed directly or through Forex brokers. NordFX offers great opportunities.
Futures contracts for cryptocurrencies offer both well-known cryptocurrencies and specially created platforms. For example, Bitfinex is one of the most reputable stock exchanges, which has been operating since 2012. It facilitates P2P trading, and users can provide their BTC or USD to other traders for margin on their positions. Leverage for futures is limited to 1:3. Bitfinex is open to users from most places, except the U.S. and several other countries. The Exchange is somewhat complicated in the user interface, which can repel beginners or less experienced traders. On the other hand, she has a strong reputation for customer support.
BitMEX is the current market leader for Bitcoin futures, reaching $4.5 billion in sales in a matter of days. Traders get access to 100-fold credit contracts with advanced trading capabilities. However, BitMEX also charges a percentage commission from the seller and the buyer. In addition, these commissions are applied on the basis of the full cost of the borrowed position, which makes the leverage 100 times more expensive. These types of fees can seriously undermine trade profits.
Another well-known exchange Huobi is constantly adding new features to its exchange platform. This is one of the few people who offer P2P deals. Huobi Derivatives also offers futures trading on BTC, ETH and EOS, and is expected to do even more in 2019. The maximum leverage is limited to 1:20, which is less than in many other exchanges
The situation in Europe can be illustrated by two exchanges. Cryptofacilities is regulated by the Financial Conduct Authority (FCA) in the UK and stock exchange funds are covered by an A-rated insurer. However, it is worth noting that users do not benefit from the usual compensation guarantees provided by the FCA Financial Services Compensation Scheme (FSCS). This is due to the fact that cryptocurrencies are not classified as “money” under UK law.
Dutch Deribit now offers perpetual swaps with the advantage of continuous payments on active positions. This makes it more competitive than many exchanges such as BitMEX, which only pays out every eight hours. Unfortunately, Deribit offers only futures contracts against Bitcoin, unlike many others on this list that offer various futures contracts secured by different assets.
CoinFLEX launched its stock exchange in January this year, which means that it is one of the new market players looking to make money in the futures markets. Thanks to the partnership with a software developer Trading Technologies, a convenient interface for trading via the ladder is implemented.
Overbit opened in February this year. Traders gain access to a wide range of markets, including Forex, indices and metals. It also offers open-ended contracts against various cryptocurrencies.
Digitex Futures is the only exchange in this list that offers a starry combination of trading benefits without any visible disadvantages. The exchange is open exclusively to DGTX token owners, who get access to trading with zero commission. The concept is simple – traders need access to trading with zero commission, because it increases the profit. Therefore, the demand for the DGTX token will determine its cost. In turn, the value of the DGTX token finances exchange operations and means that Digitex can continue to offer zero commission trading.
Digitex also implements the Ethereum plasma protocol. This means that this will be one of the first exchanges to offer decentralized account balances available only to the user with his private key. Other benefits include an easy-to-use one-click trading ladder interface and access to a range of markets other than cryptocurrencies (BTC, LTC and ETH), including Forex, indices, commodities and metals.
Given the leverage of 1:100 and automated market makers for guaranteed liquidity, it becomes clear that Digitex will soon be in the forefront.
Who’s racing in the futures market?
It is clear that maintaining low commissions is a priority for traders who do not want to reduce their profits. Choosing a stock exchange can be difficult, as there are often trade-offs between different functions. It is easier for novice traders to trust the funds of a brokerage company that provides access to trading in cryptocurrency futures. Read reviews about NordFX.
Digitex offers an optimal combination of zero commission trading without compromising security, liquidity or ease of use. Digitex’s waiting list includes more than a million subscribers, which indicates a clear interest in such exchanges.