Crypto Derivatives Market Is Bigger Than Ever, But Has Regulatory Issues
Heightened visibility, public endorsement from public figures and some impressive market bull runs has made cryptocurrency more popular than ever.
More and more people today hold and operate crypto accounts, which has led to increased transaction volumes in crypto exchanges and brokers. Public awareness of the industry is at an all-time high. With this new popularity, the sector is full of hungry competitors providing consumers with products and offerings that aim to meet the needs of crypto fanatics.
The problem with crypto derivatives and regulation
The demand for cryptocurrency-related products and services in general has existed a while. That demand still exists, but now there is even more of a demand for crypto derivatives. However, the journey to providing derivatives services has not been as straightforward. The current regulatory climate is often hostile to cryptocurrencies, especially since some lawmakers still look at the industry with suspicion and contempt.
One of the biggest crypto exchanges globally, Binance, was forced to suspend derivatives trading in several countries due to regulatory issues. As such, derivative traders who have accounts with the exchange are now worried about their trades and funds, especially as withdrawal limits were seen to be slashed daily.
Eightcap, an Australian broker, recently announced the launch of over 250 cryptocurrency derivatives. A move that has positioned it as the largest crypto derivatives offering in the industry.
Eightcap is regulated by the Australian Securities and Investments Commission (ASIC), the Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CYSEC) and the Securities Commission of The Bahamas (SCB).
Eightcap says that its customers have an alternative solution. Clients at other brokers and exchanges who are currently affected by the current issues will now have a new home for their crypto derivative trades.
Joel Murphy, CEO of Eightcap said:
“The regulatory issues crypto exchanges such as Binance are facing means traders are left with unnecessary worries about their funds and if they can withdraw them. With us, Crypto derivative traders can have a seamless experience from the moment they open an account to when they want to withdraw their funds.”
Other crypto derivatives brokers have reported actually seeing some benefit from these government regulations. The Chinese government, for example, is cracking down on cryptocurrency and the management of dYdX, a decentralized crypto derivatives trading platform, has reported that adoption within China has increased as a result.
On September 26, 2021, dYdX exceeded Coinbase’s daily transaction volume by over 15% to a record $4.3 billion.
The crypto industry is known to be resilient and it seems that both the derivatives brokers and the investors themselves are not folding under pressure but innovating towards the future and reaping the benefits.
