OKEx to Launch Bitcoin Options Trading Before Year's End

Popular cryptocurrency exchange OKEx has announced it’s set to launch bitcoin options trading later this month on December 27, with a simulation set to begin on December 12.

As detailed in a press release shared with CryptoGlobe, the move will see OKEx become the first cryptocurrency exchange to offer crypto-to-crypto trading pairs, spot, futures, perpetual swaps, and options trading in a single platform.

OKEx will offer its traders both buy and write (sell) options which “enhances trade flexibility and market transparency with trade prices that closely reflect market trends.” Other bitcoin options platforms so far only offered buy options. The exchange’s release notes it’ll use a rigorous anti-manipulation system “designed to prevent close price manipulation.”

OKEx’s CEO, Jay Hao, said:

We have been seeing the increasing demand of crypto derivative products across all our client segments, especially from our institutional clients, which have shown the fastest growing demand in derivative trading, especially on futures or perpetual swap. We aim to provide the broadest range of trading and risk management tools to all our clients.

Hao noted options are a unique instrument that lets traders manage, price, and hedge the volatility of cryptoasset with a combination of contracts. Options are a derivative that gives traders an opportunity to buy or sell an underlying asset depending on the contract they hold after paying a premium.

To access OKEx’s options trading users will have to go through a know-your-customer (KYC) verification process, and pass a suitability test to show they understand what they’ll be trading.

As CryptoGlobe recently covered the cryptocurrency exchange is also set to soon launch USDT-margined perpetual swap trading, on December 16. The USDT-margined perpetual swap delivers several underlying cryptocurrencies to speculate on including BTC, EOS, ETC, ETH, LTC, BCH, BSV, TRX, and XRP. Traders will be able to use a massive range of leverage, from 0.01-100x.

Derivatives exchange giant CME Group is also looking to launch an options product that’s tied to its bitcoin futures offering. Bakkt, the Intercontinental Exchange’s crypto venture, is set to soon launch options contracts as well. Deribit and LedgerX already offer options trading.

Featured image via Unsplash.

Top-Tier Crypto Exchanges' Volumes Climb Back to One-Third of Total Market Share

The aggregate trading volume of top-tier cryptocurrency exchanges has increased by 61.2% during the month of January, while the volume of lower-tier crypto exchanges increased 46.4%.

According to CryptoCompare’s January 2020 Exchange Review, the trading volume of top-tier crypto exchanges – those rated AA-B according to its Exchange Benchmark – climbed last month to represent 29.3% of the total trading volume in the space.

The rise is significant as in December, the cryptoasset data provider’s report showed top-tier cryptocurrency exchanges were seeing their trading volumes drop as they lost market share to lower-tier crypto exchanges, those rated C-F. At the time, they represented 26.4% of the cryptocurrency market’s total trading volume.

top tier trading volumesSource: CryptoCompare Exchange Review

The report further found that exchanges that charge taker fees represented 76% of the total volume last month, while those that implement the controversial trans-fee mining (TFM) model represented 22%.

It also found that regulated bitcoin derivatives are still dominated by the CME, whose total trading volumes went up 145.6% since December. Grayscale’s Bitcoin Trust product (GBTC) saw its total trading volume rise 131% since December.

As for derivatives trading on cryptocurrency exchanges, in January OKEx represented the majority of daily derivatives volumes, trading $4.96 billion per day and capturing 31.1% of the total market share. Huobi traded $4.29 billion a day for 26.9% of it, while BitMEX traded $3.13 billion for 19.6%.

Pure crypto-to-crypto exchanges notably represented 75.4% of the market’s trading volume, in a similar proportion to the last two months. The stablecoin space, per the report, is still dominated by Tether’s USDT, as it still represents 94% of the total Bitcoin trading volume into the top four stablecoins.

Decentralized Exchanges Lose Trading Volume

CryptoCompare’s report also addresses decentralized cryptocurrency exchanges, noting IDEX was the largest one in January. It traded a total of $10 million as its trading volume went up 25.4%, and it was followed by Switcheo and Bitsquare. While these platforms’ volumes went up, DEXs as a whole have been losing volume.

dex CHARTSource: CryptoCompare Exchange Review

According to the report they have diminished 88% since early 2019 to now represent a small fraction of the global spot exchange volume. In January, decentralized trading platform traded $17.8 million in total, representing 0.003% of the market. In January 2019, for comparison, they traded $148 million.

Featured image via Unsplash.