Although only a month in, 2020 is quickly looking like it may be a strong year for the growth of derivative trading, and investment in cryptocurrencies. While Bitcoin has been performing well, there has also been some interest in Ethereum derivatives.
There has long been futures trading for Bitcoin at places like BitMEX, OKEx, Huobi, and Binance, but institutional trading platforms have arisen in Bakkt, CBOE, and CME, as well as options trading on other assets besides Bitcoin.
One such market that is starting to reap the benefits of increased exposure and interest in derivatives trading is that of Ethereum. Since the beginning of the year, Ethereum options trading activity has picked up strongly with a few days seeing big spikes as high as $5 million, on Deribit, for example.
This still pales in comparison to some of the Bitcoin futures trading action, which is cumulatively seeing $20 billion on some days in January. But, the growth of alternative derivatives trading is still a good sign and looks to be profiting from a strong January showing.
ETH options trading activity has picked up since the start of the year pic.twitter.com/Ckkrua5mE6
— skew (@skewdotcom) January 29, 2020
Ethereum Going Beyond Bitcoin
In terms of derivatives trading, Bitcoin has always been a firm favorite with most platforms. The major cryptocurrency not only has the biggest market cap but is also still the coin that has the most effect on the general market movement.
However, when it comes to predicting the movement of cryptocurrencies, the likes of Ethereum and others that are not simply linked to the transfer of value offer investors a different type of trading experience. This is something that has been noted by Binance who is looking to offer futures trading on most of the top 20 coins, as BeInCrypto has previously reported.
With regards to Ethereum, the second-largest coin by market capitalization, there is an interesting opportunity for derivative traders who can start hedging their bets on the movement of a coin that is known to follow Bitcoin but also sometimes cut its own path as a programmable blockchain.
A Ripe Market
As it stands, January has been an impressive month of growth for Bitcoin as it has climbed more than $2,000 since the start of the year. This is also helping the futures trading of the major cryptocurrency. But, additionally, January has been good for Ethereum’s market price as it has gone from $131 to $138 in the same space of time.
A few factors are probably driving the increase in trading for Ethereum futures options. First off is the generally optimistic situation of futures trading which ties to the bullish cryptocurrency market, but also, the chance to look elsewhere and trade on a derivative market that may swing more than Bitcoin can.
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