Options are live!https://t.co/B85lrLVDQO
— SBF (@SBF_Alameda) January 12, 2020
The announcement did not include any specific details about the offering, only that its Bitcoin options. However, in another tweet just about two hours later, the CEO said the platform had hit $1m in volume, since the launch.
FTX Bitcoin Options
Even as days have passed, not a lot of information has been shared yet. It might be easy to make the assumption that specific details are only known to participants. Regardless, Bitcoin options from a platform like FTX is apparently a welcome development based on the numbers already pulled in.
The FTX platform began its services in 2019 but is already leading the derivatives market. Coingecko’s ranking puts FTX as the eight largest exchange derivatives platform, just above BTSE. FTX offers services involving different digital assets, along with over-the-counter (OTC) offerings as well.
The market for Bitcoin options is growing at an impressive rate. As more members of the Bitcoin community get involved, more institutions will adjust their offerings or create more offerings accordingly.
Back in December, Bakkt began offering Bitcoin options. It was the first offering of its kind to be fully regulated by the Commodity Futures Trading Commission (CFTC). In general, the contracts give its participants the opportunity to make interesting profits off the market.
Options contracts allow the purchase or sale of a specific amount of Bitcoin at a date and price already predetermined. Reasonably risky, the potential in the market has made it a pretty juicy endeavor for both traders and buyers.
Suppose a contract is initiated at $7,500 for three weeks. If Bitcoin happens to surge before the expiration of the contract, the trader can very easily make interesting earnings.
Future of Options in 2020
There is still a need for more options offerings in the near future. This need, it’s safe to assume, has been realized by the exchanges who are now stepping up. Bakkt started in December and FTX has just joined the league. The CME Group Inc. will also launch its own Bitcoin contracts today.
In many other financial climes, the derivative markets usually outweigh spot markets in volume. For the crypto market, it’s the other way round. However, with these new offerings, things just might be set to change.
As CME launches its offering, there’s a very good chance that other platforms are sparked enough to begin theirs as well. If this happens, the Bitcoin futures contract market will have enough players to create interesting competition in the market. Apart from the halving, maybe this is just enough to raise Bitcoin into another rally.
In December 2019, FTX received an undisclosed investment from the world’s biggest crypto exchange platform, Binance. It makes sense that the platform used this new funding to facilitate its Bitcoin options offering.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.