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Traders Speculate Bitcoin in the Derivatives Market

Updated: Jan 9

With BTC again edging toward all-time highs, a large volume of cash is flowing into the Bitcoin derivatives markets.

According to crypto market data aggregator Glassnode, outstanding fates contracts drove into new all-time highs on March 11, with open interest across exchanges approaching $20 billion.

Choices have also flooded to see record volumes in 2021, with Derebit now regularly hosting more than $1 billion worth of daily trade.

According to Binance-owned CoinMarketCap, the three-largest centralized derivatives exchanges - Binance, Huobi Global, and ByBit - address more than $100 billion in combined daily trade. Binance alone is $57 billion. The following ten most noteworthy ranked exchanges facilitated more than $65 billion in trade in recent hours.

Notwithstanding, regardless of the surging volumes, some decentralized derivatives exchanges appear to be struggling to attract the force of their centralized counterparts.

Skyrocketing Ethereum expenses appear to have eased back the development of decentralized choices, with the complicated smart contract executions needed to interact with some Ethereum-based protocols resulting in gas costs of more than $1,000.

Similarly, record charges also appear to have stopped traders from Ethereum-controlled decentralized prospects, with the daily volume on dYdX plummeting from many billions in January to generally $100 million over the past week.

Ongoing liquidity issues on the popular on-chain alternatives trading protocol Hegic also impact Etherum's decentralized choice markets.

On March 11, Ribbon Finance founder Julian Koh announced the protocol's "Strangle" item had been temporarily disabled due to "no liquidity in the Hegic pools." Koh also noted interruptions to Ribbon's value feed resulting from ongoing upgrades to Defi choices protocol Opyn.

On Discord, Ribbon's founder noted the team is right now working on integrating with individual Defi choices protocol, Charm Finance, "as a new liquidity source to solve the liquidity issue."

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