Crypto derivatives volumes hit an all-time high in January 2022

Trading in derivatives increased 10% in  January, hitting a new high amid speculation, data highlighted by CNBC’s Kate Rooney showed.

Despite the slump in crypto prices over the last few months, data shows the trend in crypto derivatives picked up in Janaury and hit a new all-time high.

CNBC’s Kate Rooney, in an interview in which she highlighted trading volumes in the spot markets versus derivatives in January 2022, said the latter spiked as speculation increased amid a broader crypto price rout.

“The action lately has been in crypto derivatives, which tend to be more risky and speculative. Those are booming and hit a new all time high in Janaury,” she noted.

Monthly trading volume on spot markets hit above $2.5 trillion in 2021 as Bitcoin price rallied to its all-time high. However, those volumes have steadily shrunk since the November peak, with current spot volumes around

Coinbase and Robinhood are good examples she explained, noting here it's basically buying and selling Bitcoin and other listed cryptocurrencies. Crypto Compare data the analyst pointed to showed spot trading was down 30% in January when compared to monthly volume over December.

The declines put the figures at their lowest level since July when a mini-slump in crypto prices gave way to a new bull run to Bitcoin’s $69,000.

“Derivatives are picking up the slack, that could be futures or options,” she noted, adding that “volume on this side of the market” accounts for 61% of the total volume. In terms of percentage increase, derivative volumes have jumped 10% over December figures.

Traders looking to cash in on lucrative trades are behind the rise in derivative volumes, most of which is on Binance, the world’s largest crypto exchange by trade volume. 

The exchange accounted for over $1.5 trillion in futures and options trades, while OKEX, FTX, Bytbit, BitMEX, and Huobi also recorded significant numbers.