The Best Exchanges to trade Cryptocurrency derivatives

Do you want to trade Cryptocurrency derivatives? Now you are looking for an exchange to invest in Cryptocurrency derivatives?

Check out the 3 best exchanges to invest in Cryptocurrency derivatives today.

Best Exchanges to trade Cryptocurrency derivatives Description
1. Bybit Bybit offers stablecoin-margined Options contracts to help you expand trading opportunities, and Portfolio Margin to help you maximize capital efficiency.
2. Binance The largest Cryptocurrency exchange in the world. Buy, trade, and hold 600+ cryptocurrencies on Binance
3. Huobi Huobi, a Leading Digital Asset Trading Platform. A wide array of digital asset trading and management services to satisfy diverse trading needs.
4. BitMEX Supporting more than 30 Cryptocurrencies. Get crypto’s most advanced trading platform on your device.

List of Cryptocurrency Exchanges

Cryptocurrency derivatives trading for beginners

Cryptocurrency derivatives trading adds flavor to the highly volatile crypto market. Traditionally, cryptocurrency traders have physically bought and sold cryptocurrency coins from one cryptocurrency wallet to another.

In 2017, exchanges primarily intervened in fiat-to-crypto exchanges and facilitated cryptocurrency trading between cryptocurrency owners. During that time, buying and selling cryptocurrencies required a cryptocurrency wallet that was compatible with all cryptocurrencies. However, due to the volatility of cryptocurrencies, it is too risky to physically hold cryptocurrencies for trading. For example, let’s say you bought Bitcoin in December 2017 when the price of Bitcoin was well above $19000. At the beginning of 2018, the price starts to drop sharply and all the way down to below $10,000. He must have lost a significant amount of fortune to this day. So, traders had to find a better way to trade cryptocurrencies.One of them was to trade cryptocurrencies alongside other currencies such as foreign exchange. In fact, almost all forex brokers today have their crypto pairs listed on their platform. However, this did not solve the volatility problem. Forex traders have to stay awake at all times. Cryptocurrency prices change in seconds and the daily range is usually very large. This is where cryptocurrency derivatives shine. They capitalize on the volatility of cryptocurrencies by giving them the opportunity to use financial contracts at future market prices.

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Advantages of Trading Cryptocurrency Derivatives

  1. Speculative trading is possible through cryptocurrency derivatives trading. It is very risky to trade unstable assets such as cryptocurrencies with rapidly changing market prices. But at the same time, it offers a better opportunity for a bigger profit. Derivatives help traders take advantage of bullish and bearish trends by making speculative trades and provide better results.
  2. Cryptocurrency derivatives provide an opportunity to use leverage in trading. Leverage allows traders to start larger trades with less investment capital. However, leveraged trading is a double-edged sword because if the trade deteriorates, the loss is also large.
  3. Cryptocurrency derivatives trading gives you the ability to hedge your position against holdings in other cryptocurrencies. Because derivatives are traded with leverage, a portion of the revenue can be used to purchase other contracts. The other acts as insurance in case one of the two contracts goes wrong.

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How to Trade Cryptocurrency Derivatives

1. Sign up for a cryptocurrency exchange that offers cryptocurrency derivatives

To start trading cryptocurrency derivatives, you must first sign up for an exchange that offers cryptocurrency derivatives. Most exchanges in the current market deal mainly with leveraged or margin trading, so there are not many such exchanges yet. A good example of cryptocurrency derivatives trading is

The signup and verification process is pretty fast, so you can start trading as soon as possible.

2. Open a demo account

Before you start trading on a new cryptocurrency exchange, it is very important to properly understand how to use the platform. It would be a good idea to set up a demo account where you can trade cryptocurrencies for learning purposes. If you are new to cryptocurrencies, a demo account will give you the expertise and experience you need to trade. A demo account will be very helpful, especially if you want to test out a new strategy.

4. Open a live account and make a deposit

Once you are familiar with the exchange platform, you can open a live trading account and make a deposit. However, before depositing, you should find out what deposit methods and currencies the exchange accepts. Knowing this first will help you choose the method and currency that works best for you.

5. Start trading

To start trading, you must first select the leverage you want to use. Then enter the amount you want to trade and it will be calculated according to your leverage factor. You can then ‘buy’ or ‘sell’ depending on the expected price action. If you think the price will go up, you should ‘buy’, if you think it will decrease, you should ‘sell’. Most derivatives trading platforms have a ‘Contract Details’ page that shows all information about a contract at a glance. Further, for trade management, you can use the ‘Position’ panel where you can check your profit or loss.

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Difference between Bitcoin and Blockchain

If you are a beginner in the cryptocurrency world, you must have heard the words “ Bitcoin ” or “ Blockchain ” all the time. Many people use the two terms interchangeably, but in fact each has its own concept. Today we will look at the uses and differences between the two.

What is blockchain?

A blockchain is an electronic ledger and its sole purpose is to record transactions. In the case of cryptocurrencies, each time a coin is transferred, a permanent record is securely recorded on the blockchain. Governments, businesses, and individuals use and maintain ledgers for a variety of purposes. So, how is blockchain different from traditional ledgers? The biggest difference is ‘decentralization’. The example mentioned above has a specific organization/institution controlling all records, but in the case of a blockchain, the opposite is true. There is absolutely no person or institution overseeing the transaction. Instead, all participants, regardless of position, help copy, maintain and manage the virtual ledger. In other words, anyone who chooses to participate in this system becomes a network node. Thus, it provides the computing power to help confirm, maintain, and secure transactions. Blockchain combined with cryptographic processes is a much more secure and anti-counterfeiting option than traditional blockchains. For more information about blockchain, see What is a Blockchain?

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What is Bitcoin?

Bitcoin is the first and most popular cryptocurrency , and various existing derivatives such as Bitcoin trading and Bitcoin futures have been developed based on this. Bitcoin is designed to be anonymous, decentralized and secure. To achieve its goal, cryptocurrency uses blockchain technology as its core. As mentioned above, whenever Bitcoin is sent or moved, a transaction is recorded on the blockchain. Participants from all over the world provide computing power to help secure and record these transactions. These ‘miners’ receive newly generated bitcoins as a reward for helping to maintain the system. The result of this system is an internet currency that can be shared instantly around the world. Users can remain anonymous with all they need is a computer, virtual wallet and internet. Also, due to its decentralized nature, the government cannot control the supply of this currency.

Things to remember:

  • Bitcoin is a decentralized and anonymous cryptocurrency.
  • Bitcoin securely records transactions with blockchain technology.
  • The blockchain’s virtual ledger is maintained by users around the world.
  • Blockchain is also decentralized and uses encryption for safety.

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Bitcoin history

Bitcoin has always been considered a new technology. Bitcoin’s history actually dates back to 2009, and the idea itself was conceived much longer. Bitcoin has really grown so much that if you invested a few complaints at the time the technology was invented, it would be called a few million dollars by now. It’s best to learn history to avoid making the same mistakes. So today, let’s take a brief look at the history of Bitcoin and cryptocurrencies.

1998 – 2009 Bitcoin History

Bitcoin is considered the first cryptocurrency, and several attempts were made before the final version was released. The most famous are the online currencies B-Money and Bit Gold, which were ledger-protected by encryption. Both technologies have been formulated but not developed.

2008 – Who is Nakamoto?

In the same year, an unidentified person named Satoshi Nakamo posted a paper titled ” Bitcoin P2P Electronic Money System ” on the mailing list about encryption .

2009 – The beginning of Bitcoin history

Just a year later, Bitcoin software became popular and mined for the first time. The procedure consisted of a new bitcoin being created and the transaction being recorded and authenticated on the blockchain.

2010 – First transaction of Bitcoin

Until 2010, Bitcoin was mined but not traded. I couldn’t give it a monetary value. In 2010, someone first wanted to sell bitcoin and exchanged 10,000 bitcoins for two pizzas. Had I still had this coin, it would have cost over $100 million.

2011 – New Cryptocurrency Competitors

At this stage, Bitcoin became popular and the idea of ​​decentralized and encrypted curry began to evolve. Known as altcoins, they generally seek to be better versions of Bitcoin by offering greater speed, anonymity, and other benefits. Some of them are called Namecoins and Litecoins.

2013 – Bitcoin Price Crash

Shortly after Bitcoin reached $1,000 for the first time, the price began to plummet. Most people who invested in that stage suffered huge losses. At this point, it will take several years for Bitcoin to reach $1,000 again.

2014 – Fraud and theft

Bitcoin has attracted the attention of many criminals over the years due to its anonymity and lack of control skills. Perhaps the biggest event occurred in January 2014, when the world’s largest bitcoin exchange, Mount Gox. 850,000 Bitcoins were stolen and an investigation into who did what and how has begun. At the time, the stolen bitcoin was worth $450 million, or about $4.4 billion today.

2016 – Birth of Ethereum and ICOs

As the heat of the Ethereum platform grew, there is a cryptocurrency that tried to hijack the popularity of Bitcoin, and that is Ether. The advent of Initial Coin Offerings (ICOs) marked the advent of Ethereum. As a fundraising platform, it has provided an opportunity to invest and trade in cryptocurrencies, such as how to trade venture stocks.

2017 – Bitcoin continues to rise after reaching $10,000

Bitcoin continues to grow and expand today, creating new things like Bitcoin Cash. With the intervention of governments around the world, the number of users who trade Bitcoin every day continues to grow. Banks are investing in Bitcoin, and NGOs are also accepting donations in Bitcoin. In this way, more money has flowed into the Bitcoin and cryptocurrency ecosystem. During this period, the market cap of all cryptocurrencies has risen from $11 billion to over $300 billion today.

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Why trade Cryptocurrency Derivatives?

Why Are Cryptocurrency Exchanges Competing To Offer Derivatives To Their Customers?

Derivatives trading is a highly profitable strategy in the cryptocurrency world. The cryptocurrency market has been booming since 2017. Cryptocurrency derivatives are important enough to become a way of life for cryptocurrency traders.

Different platforms offer different options for trading derivatives.

Futures exchanges such as Bybit and Binance exchanges offer standardized derivatives contract trading, which is a futures contract for a full range of underlying assets.

Bybit is one of the new derivatives exchanges where BTC, USD, BTC, ETH, XRP, LTC, EOS, etc. can enter into a permanent contract and utilize up to 100 times. Before we talk about this ‘flaming competition’ between exchanges to offer derivatives to customers, let’s talk about what derivatives really are.

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What are derivatives?

A derivative is a contract between two or more parties whose value is based on a pre-agreed underlying financial asset or set of assets. Common underlying instruments include bonds, commodities, currencies, interest rates, market indices, and stocks.

Derivatives traded on exchanges are financial instruments traded on compliant exchanges based on assets of another value.

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What is the purpose of derivatives?

As derivatives trading continues to expand globally, competition among cryptocurrency exchanges is heating up for a large share of the lucrative derivatives market. Derivatives trading volume reached 25.2 billion in 2016, a 2% increase from 2015. Derivatives trading followed, reaching all-time highs worldwide in 2018, with more than 30 billion contracts traded on exchanges and only futures trading up 15%. The purpose of derivatives is to manage assets and, in particular, to reduce risk. When entering into a derivatives contract, the parties to the transaction usually want to be free from certain risks for a set period of time. Therefore, the primary purpose of a derivatives contract is to transfer risk without the need to make an underlying transaction. This allows for more effective risk management, and the derivatives market plays an important role as a market for efficiently discovering information.

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What is the role of derivatives exchange?

Exchanges play an important role in dealing with derivatives such as futures and options. For example, in futures, the exchange will receive a refundable margin from buyers and sellers. The buyer and seller exchange the contract for an asset at the strike price. Trading derivatives in the cryptocurrency space has been a matter of speculation and discussion, but recently the number of platforms offering derivatives trading is rapidly increasing. Additionally, many exchanges are considering starting options trading in Q1 2020. Therefore, in 2020, the competition among cryptocurrency exchanges to launch derivatives is expected to intensify.

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