Genesis Trading Report: Crypto Derivatives Set for Substantial Expansion
The Q2 2023 report from Genesis Trading reveals that the crypto derivatives market is poised for significant growth. With spot market liquidity decreasing and a shift towards derivative instruments, it is clear that the future of crypto volumes lies in derivatives. The decline in spot trading activity, with a 36% decrease in total spot trade volume, has prompted the introduction of various crypto derivatives to address the issue.
Main Breakdowns:
- The decline in spot market liquidity is driving the growth of the crypto derivatives market.
- The SEC’s regulatory actions against exchanges like Bittrex, Binance US, Binance, and Coinbase have led to a decrease in spot trading activity.
- The consequences of the SEC’s actions extend beyond spot trading, resulting in a significant loss of liquidity for top tokens.
- The Genesis report highlights the potential of a strong crypto derivatives market to drive institutional adoption amidst regulatory uncertainty.
- Key developments in Q2 2023 include Deribit setting a new record for option contracts traded and Coinbase introducing institutional-sized futures.
Hot Take: The decrease in spot market liquidity and the regulatory actions by the SEC have pushed crypto traders towards derivatives. As established financial institutions enter the sector, the crypto derivatives market is expected to expand by tenfold its current size. This presents an opportunity for global institutional adoption of cryptocurrencies.
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