Why are derivatives important to the cryptocurrency economy? The answer to that question is rather long, but cryptocurrency derivatives provide liquidity to the market at their most basic level. These are financial instruments that traders use to hedge against a current asset they are holding whose price might go down.
Also, there are arbitrage opportunities for cryptocurrency derivatives just like their spot counterparts. Moreover, derivatives attract a whole new generation of speculative traders who look forward to profiting from cryptocurrencies' volatility. So, consider them as the pillars of the crypto economy.
Cryptocurrency derivatives, which are basically contracts to buy and sell a crypto asset at a particular price in the future, are traded on exchanges that support cryptocurrency derivatives. You may want to know about which are the most trustworthy crypto derivatives exchanges since there are so many. Take a look at our list of the best crypto derivatives exchanges, and you will have your answer.
Binance Derivatives Exchange
Binance enjoys the lion's share of crypto traders worldwide with the highest trading volume for more reasons than one. It supports almost all the key fiat currencies and has integrated the major payment gateways across the globe to make on-ramping feel like a breeze.
You would find all the major cryptocurrencies listed on this exchange with multiple trading instruments, including their derivatives. Binance gets more traders on its spot and peer-to-peer trading markets. However, it is also one of the best crypto derivatives exchanges of 2022 due to the following factors:
- The range of cryptocurrencies derivatives is higher than anywhere else. Besides Bitcoin and Ethereum, Binance derivatives platform support Bitcoin Cash ("BCH"), Aave ("LEND"), Cardano's ADA ("ADA"), ChainLink ("LINK"), Compound ("COMP"), Cosmos ("ATOM"), Curve DAO Token ("CRV") and more. Find more about Binance derivatives here.
- Binance supports almost all fiat currencies globally and is tied to major banks, credit card companies, and external wallet services. So no matter where you are based in the world (except the US, because Binance US does not support cryptocurrency derivatives), you can enter the crypto market easily via Binance.
- Another factor that makes Binance one of the best crypto derivatives exchanges is that it offers the highest number of leveraged tokens allowing traders access up to 3x the size of their investment without the risk of liquidation. Tokens on offer include:
- Bitcoin Up / Bitcoin Down
- Ethereum Up / Down
- Cardano's ADA Up / Down
- LINK Up / Down
- Binance Coin Up / Down
- Tezos Up / Down
- EOS Up / Down
- Tron’s TRX Up / Down
- Polkadot Up / Down
- Ripple’s XRP Up / Down
- Litecoin Up / Down
- Binance Futures market supports coin-margined and stablecoin-margined perpetual swaps and options with up to 125 x leverage.
- Binance Futures grid charts offer a TradingView that gives users access to various indicators and drawing tools to conduct technical analysis.
- Binance Futures' offers traders some lucrative discounts and bonuses. For example, if you use BNB, you get a 10% discount on both taker and maker fees. Additionally, you can earn up to 30% of your invitee's Futures trading fees through Binance's referral program.
- There's no KYC needed for Binance Futures as long as you keep your withdrawals below 2 BTC every 24 hours.
Bitmex Derivatives Exchange
BitMEX is one of the best crypto derivatives exchanges that allows crypto investors to trade Futures and Perpetual Swap contracts across 16 cryptocurrencies. Their list includes Bitcoin, Ethereum, Cardano, Avalanche, Axie Infinity, and Ripple. Check the complete list of all supported assets here.
Though the number of crypto derivatives listed on BitMEX is less in number than Binance, the exchange offers multiple contracts for each derivative and keeps adding to its existing range. For instance, on 16th March 2022 BitMEX is going to list new quarterly Futures.
BitMEX also offers 100x leverage on trading, and the maker and taker fees are also lower than other exchanges. Higher volume traders get more discounts on trades. Here's a fees breakdown on BitMEX:
BitMEX is ideal for those who are already cryptocurrency holders as it does not handle fiat currency.
FTX Derivatives Exchange
A reason for including FTX crypto derivatives exchange in this 2022 list is that, unlike most platforms, FTX offers its derivatives products to US citizens. FTX was founded in 2018 by an MIT graduate. It allows users to access various crypto derivatives products from Perpetual Futures to crypto options to leverage tokens and bitcoin volatility tokens. FTX exchange offers traders up to 101x leverage.
One standout feature of FTX is that it supports Bitcoin options that you can design, customize, and set a quote for. FTX presents the first offer within 10 seconds. So, that's a trading opportunity you can make the most of.
FTX also supports a unique crypto volatility product called Move contracts. Move contracts represent the price movement of an asset within a time frame. For instance, traders can profit from Ethereum's price move either way (upside or downside) by going long and short. Move contracts are available on FTX for the following timeframes:
As far as maker/taker fees on FTX are concerned, here's the structure:
KuCoin Futures is one of the top 10 global crypto derivatives exchanges and will continue to remain so in 2022 because of the following benefits:
- It supports over 70 coins (all major ones) with up to 100x leverage.
- KuCoin Margin supports over 70 coins, including Bitcoin, Ethereum, Litecoin, and KCS, with up to 10x leverage.
- Ensures market depth and liquidity to make sure that traders don't suffer from drastic market fluctuations.
- Enables instant withdrawal
- Furthermore, its crypto derivatives trading features like KuCoin Lite and KuCoin Brawl are designed for new crypto derivatives traders.
C-Trade is one of the best cryptocurrency derivatives exchanges for its amazing bonuses, rewards, and competitions incentivizing traders' derivatives. Plus, it supports lightning-fast transactions to avoid missing out on a good trading opportunity. You can engage in derivatives trading connected to Bitcoin, Ethereum, Litecoin, Ripple, Binance Coin, and Bitcoin Cash here with up to 150x leverage.
C-Trade also has an affiliate program that allows users traders to earn up to 40% commissions. The commissions are generated from the trading fees that referrals pay to make a trade. You can sign up for the affiliate program here.
"C-Trade provides TradingView charts to allow users to observe and monitor the price charts of hundreds of assets, including cryptocurrencies, and share and discuss crypto trading ideas about the market. The indicators are a key part of technical analysis that provide traders with highly sought-after degrees of price predictability on volatile markets such as crypto. TradingView is free to use for anyone. Also, there are paid subscriptions that increase the number of charts and indicators you can view simultaneously.”
Furthermore, at C-Trade, taker fees are 0.075%, and maker fees are 0.025% per order. The withdrawal fees are also less, rendering C-Trade one of the best crypto derivatives exchanges with low fees.
Finally, we have Coinbase, which is USA's most trusted cryptocurrency exchange. This year it's going to launch its crypto derivatives trading segment in collaboration with FairFX, a CFTC-regulated derivatives exchange.
The partnership will unlock crypto derivatives trading for retail and institutional customers in the US. So, if you are in the US interested in crypto derivatives, you better keep an eye out for Coinbase.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. C-Trade, its affiliates, agents, directors, officers, or employees do not guarantee the accuracy, validity, timeliness, or completeness of any information or data made available and assume no liability as to any loss arising from any investment based on the same.