Bitcoin derivatives are new and they may become one of the major ways that Bitcoin is traded.
Today more and more traders are switching from trading Bitcoin itself to using what can often be more flexible instruments such as Bitcoin futures, options and swaps.
Let’s take a look at what Bitcoin derivatives actually are.
Trading Bitcoin Derivatives
Bitcoin derivatives are agreements for traders to purchase or sell Bitcoin at a predetermined price, time and amount in the future.
There are a number of types of derivatives including futures, which require the transaction to take place, and options, which allow the option for the agreed trade to take place.
As a way of increasing flexibility, derivatives allow traders to trade Bitcoin without having to hold the underlying asset itself.
Best Bitcoin Derivatives Platforms
PrimeXBT
PrimeXBT is the world’s largest multi-asset margin trading platform, providing a range of assets and instruments that includes CFDs, cryptocurrencies like BTC, ETH, LTC, EOS and XRP, as well as traditional assets like stock indices, forex pairs and commodities.
Traders can enjoy high leverages of up to 100x for all crypto-assets, and up to 500x for all traditional assets.
One of the main drawcards of the site is that it has the lowest fees on the market at a flat rate of just 0.05% on all trades.
This coupled with the ability to create an account in 1 minute with just an email address and no requirement for KYC makes trading at PrimeXBT simplified compared to many other sites.
PrimeXBT is known for having a very user-friendly interface, equipped with a wide range of charting tools, and over 50+ professional indicators.
Deribit
Deribit specializes in providing Bitcoin futures and options, and although the platform receives mixed reviews it’s important to have it listed here.
Following their launch in 2016 Deribit immediately started providing derivative for cryptocurrency that were largely not available at that point.
The problem with the platform has been consistently poor reviews regarding customer service and the reliability of their trading tools - which is a shame considering the potential of the site.
Deribit still provides some unique instruments, and keeps a steady user base with fairly low liquidity compared to other platforms.
Conclusion: How to Trade Bitcoin Derivatives in 2020
Bitcoin derivatives are here to stay and now might be the time to look into the new options coming into the marketplace.
PrimeXBT and Deribit are two good starting points to find out more about how these advanced types of Bitcoin trading can lead to increased revenue and profitability.