Summary

Total crypto derivatives volume in Q1 2020 surpasses $2 Trillion in Q1 2020

Average daily derivatives trading volume was $23.3B, up 274%

Bitcoin, Ethereum, and EOS pairs account for 90% of the volume

Huobi has overtaken BitMEX in the leading crypto derivatives exchange by volume

A study by crypto research firm, TokenInsight, shows that the crypto derivatives market has seen a surge in interest in Q1 2020. Most notably, the total crypto derivatives volume in Q1 2020, surpassed $2 trillion in Q1 2020, a 314% increase from the 2019 quarterly average.

Average Daily Volume

The report states that the average daily derivatives volume increased more than two-fold in Q1 2020. The highest single day in 2020 Q1 printed a total volume of $62.5 billion.

TokenInsight

Furthermore, the majority of cryptocurrency futures were traded in Singapore followed by the United States.

With derivatives volume skyrocketing in 2020 Q1, it is clear that investors are taking interest in the new trading opportunities that arise.

Futures Trading Pairs

Many exchanges offering cryptocurrency futures only support major cryptocurrency pairs due to a lack of liquidity. As a result, Bitcoin, Ethereum, and EOS account for 90% of derivatives volume. Unsurprisingly, BTC futures accounted for 78% of total volume in 2020 Q1.

Furthermore, Huobi has overtaken BitMEX as the leading crypto derivatives exchange by volume. Huobi alone saw $438 billion in crypto derivatives volume in 2020 Q1. Other well-known exchanges like Binance have also seen record-high futures turnover in 2020 Q1.

However the hyped crypto derivatives platform Bakkt, only accounted for $1.51 billion in crypto derivates volume.

Futures Indicators

During the quarter, the correlation coeffcient between futures trading volume and the spot trading volume slips to 0.31; was 0.76 in 2019 Q4. This phenomenon indicates that the futures market participants may have been relatively independent from the spot. 2020 Q1 Cryptocurrency Derivatives Exchange Industry Report

What’s interesting is the decoupling from traditional spot exchange pairs. With market correlation with spot pairs halving in 2020 Q1, crypto futures are now shifting away from being “just” an addition to the spot market and into an independent market.

Furthermore, TokenInsight researchers were able to conclude that certain futures trading pairs act as market indicators. Meaning, price movements acts as an indicator of spot price movement for certain pairs. As a result, traders can now look at futures movement as a leading indicator in determining spot pair movement.

Crypto Derivatives Outlook

With crypto futures trading surging in 2020 Q1, the outlook is bright. While futures trading only accounting for 20% of spot trading, the analysts predict that futures volume will more than double spot volume by the end of 2020.

As the crypto derivatives market rapidly evolves, many new profit opportunities are opening up. While traders jump onto the derivatives train, many exchanges will focus on expanding their offerings.

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