Best cryptocurrencies for trading crypto derivatives

Best cryptocurrencies for trading crypto derivatives

By Motiur Rahman - min read

A crypto derivative is a financial product or instrument whose intrinsic value is based on the value of an underlying crypto asset. There are many crypto derivatives including futures, options, and Contracts for Difference or CFDs. Here are some important facts about these instruments:

  • Crypto derivatives are available on selected exchanges only and come with a significant degree of risk.

  • Derivatives are typically leveraged products with the potential of making rapid gains or losses within a short time.

  • Not all cryptocurrencies are available for derivatives trading, but more are expected to be in the near future.

Well, for investors who want to take advantage of leveraged derivatives in the crypto market, here are 2 assets to consider:

Bitcoin (BTC) Derivatives

As the most established crypto in the world, it was only a matter of time before trading in Bitcoin (BTC) derivatives started. In fact, exchanges like Binance have dedicated derivative products for Bitcoin including futures, options, and others. 

Data Source: 

Also, Bitcoin (BTC) is supported across all the major exchanges, giving you more flexibility to trade. Many online brokers also provide leveraged Bitcoin (BTC) derivatives to global clients. It should therefore be easier to invest and besides, with the kind of liquidity you get with Bitcoin, filling orders is going to be very easy.

Ethereum (ETH) Derivatives

Ethereum (ETC) derivatives are also supported in literally all exchanges. Also, this is a coin that generally gets huge trading volume and as a such, it offers enough liquidity to trade leveraged derivatives with ease. 

Exchanges are also creating highly customised Ethereum (ETH) products that can be a bit complex for the average investor. But the key thing to remember here is that the value of the derivative will always rely heavily on the value of Ethereum (ETH) in the open market. At the time of writing, ETH was trading at $3, 812.