The cryptocurrency market is ever-changing with new instruments and ways to profit continually being created and introduced.



While there are plenty of traders that may have heard of terms like cryptocurrency derivatives and bitcoin derivatives, there are still many who do not fully understand exactly what these instruments are and why they can substantially improve the way that training is conducted.

We’re going to take a look at this relatively new type of financial tool, including exactly what cryptocurrency derivatives are, as well as the best places online to buy and sell them.

What are Bitcoin Derivatives Exactly?

Bitcoin derivatives are simply an agreement between parties to trade an amount of Bitcoin at a given date and for a set price.

There are three main types of bitcoin derivatives being Bitcoin futures, Bitcoin options, and Bitcoin perpetual swaps.

Bitcoin futures are a standard kind of Bitcoin derivative, being that they fit the description above and are required to be completed once the given date is reached.

Bitcoin options are almost the same as Bitcoin futures, other than the fact that they are optionally able to be completed instead of being required to do so.

Bitcoin perpetual swaps are also very similar to Bitcoin futures except for the fact that they are settled in USD instead of being settled in Bitcoin.

Traders often get involved with buying and selling Bitcoin derivatives instead of buying Bitcoin as the underlying asset for a number of reasons, but perhaps the main reason being the reduction in regulatory and legal requirements that are included whenever a trader actually buys Bitcoin itself.

Where are the Best Bitcoin Derivatives Trading Platforms

PrimeXBT

PrimeXBT is one of the world’s leading cryptocurrency derivatives trading platforms, and lists a wide range of cryptoassets as well as traditional assets.

Traders can get leverage on a range of cryptoassets that include Bitcoin, Ethereum, Ripple, Litecoin, and EOS, with leverage of up to 100X, on a wide range of traditional assets that include some of the world’s leading stock indices, metals, forex pairs, and commodities, with leverage of up to 1000X.

Unlike a number of other platforms that have suffered large scale hacks of sometimes hundreds of millions of dollars, PrimeXBT prioritizes the security of their users’ funds with bank-grade security features, and as a result have never been hacked and have never been breached by any hackers or other party.

Also unlike a number of other platforms which can be up to 10 times more expensive than PrimeXBT, the fees at this platform are kept at a low flat rate of 0.05%, and this is applied across all assets on the platform, whether a large amount or small amount of an asset is traded.

KuCoin

KuCoin is a cryptocurrency derivatives specialized platform that has launched in the past few years and has gained a fair amount of the market share involving Bitcoin derivatives.

KuCoin is not a complicated platform to use, and is quite suitable for new users, however the features on the platform are somewhat limited in comparison to other cryptocurrency derivatives trading platforms available.

As well as this to the relatively low liquidity of KuCoin is concerning to some users being that slippage can often be a major problem as a result of this.

Saying this, KuCoin does list a fairly wide range of derivatives on the platform and is worth consideration for anybody that is interested in this specific kind of financial instrument.

In Conclusion

As the cryptocurrency market expands in size and diversifies, new ways to trade are becoming more prominent and are now responsible for a much larger amount of the daily global cryptocurrency trade volume.

Bitcoin derivatives are useful for those traders that would like to limit their regulatory responsibilities regarding owning cryptocurrencies, involving areas such as the legality of cryptocurrency ownership, as well as taxation.

PrimeXBT and KuCoin are two platforms of many that list these kinds of assets, however these two platforms represent the top-tier of cryptocurrency derivatives trading platforms available online today.