Ever since cryptocurrencies became one of the world’s best known digital assets, there has been widespread talk about creating derivatives backed by the leading ones. However, it never really came about due to regulatory issues and lack of popular demand.
The climate has changed significantly over the past year or so and slowly but steadily, many crypto firms have been able to secure permission from the regulators to offer derivatives to their customers. Deribit is one of the few exchanges that is almost solely engaged in dealing in crypto futures, and today, the company made an important announcement.
Cryptocurrency Exchange Makes Big Announcement
As of now, Deribit only deals in futures and options that are backed up by Ethereum and Bitcoin. However, today, the company stated that it has tied up with Paradigm, which is engaged in providing institutional traders with a messaging service, to provide a bulk trading platform. It goes without saying that the bulk trading is going to be in crypto derivatives created out of Ethereum and Bitcoin.
The minimum size of the bulk trades has also been decided by the company. The minimum size for trade in Bitcoin is going to be 40 tokens, while for Ethereum it is going to be 800 tokens. In other words, a Bitcoin option has to be worth $400,000, while an Ethereum option trade has to be worth $150,000 at least.
It needs to be pointed out that Deribit is based out of Amsterdam in the Netherlands and the company is not under the purview of the Dutch authorities. Payouts in cryptocurrencies are not recognized by the regulators in the Netherlands. However, it is necessary to point out that the crypto sphere is extremely volatile and can often lead to major losses if a trader is careless. Deribit has, however, created a separate insurance fund that will protect it from losses incurred from traders who might not be able to honor the payments for having gone bankrupt.
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