The crypto derivatives market has grown by leaps and bounds in 2021, with digital assets exchange platforms reporting record-high trading activities. Notably, the growth of the derivatives market is exemplified by the growing demand for Bitcoin futures contracts. The global open contract, which was worth $3 billion back in January 2020, has surpassed the $22 billion mark, according to skew.com.
With this in mind, it has become necessary to evaluate the explosiveness of the crypto derivatives market by analyzing the shares of digital asset exchanges using open interest as the standard measure. Note that we have opted for open interest metrics because it paints a clearer picture of trading activities and it provides an accurate means of measuring the flow of money into a derivatives market.
Here are the top 10 crypto derivatives exchanges by open interest.
Launched in 2017, OKEx remains one of the oldest and most reputable crypto exchanges. Over the years, OKEx has adapted to emerging trends and has continued to feature prominently in the top echelon of the crypto exchange market. The exchange offers traders a variety of ways to engage with the crypto market, including a budding derivatives market, and other crypto finance offerings.
For the better part of 2020, OKEx emerged as the largest crypto derivatives exchange as a result of its competitive derivatives products and fees. With OKEx, traders can access perpetual contracts, futures, and options all on one platform. As a result, OKEx has maintained its high-flying status, regardless of the emergence of formidable competitors in 2021. According to data from The Block, OKEx accounts for 13.79% of global open interest for BTC futures worth over $3 billion and averages 24-hour futures open interest worth $4 billion. As such, it is currently the 3rd biggest Bitcoin futures exchange globally.
Binance is popularly known for its strategic listings and relatively low fees. Remarkably, the exchange has managed to replicate this formula in its derivatives market to great effects. Earlier this year, Binance stamped its dominance in the BTC futures market by accounting for over $4 billion worth of open interest equivalent to 18.22% of the global tally. The 24-hour open interest of Binance’s futures is currently above $9 billion.
One of the compelling selling points of Binance is its low trading fees set at 0.02% and 0.04% for maker and taker fees respectively. Also, traders get to access up to 125X leverage, depending on their affinity for risks. These features, combined with the established status of Binance in the spot trading market, have propelled its derivatives products to success.
Bybit has carved a name for itself in the crypto derivatives market in just under 3 years of operations. The exchange currently averages 24-hour trading volume worth $20 billion and accounts for 15.66%, or $3.59 billion, of the global tally of open interest for BTC futures. At the time of writing, the 24-hour open interest of its futures market is around $4.3 billion.
The rise of the Asia-based exchange in the global rankings indicates the growth of retail participation in the crypto derivatives market. 70% of Bybit’s clientele are reportedly retail traders while the other 30% are institutional accounts. Another propelling factor might be its referral program launched in January 2021. Bybit pays a $10 bonus to new and existing users participating in the referral scheme as part of its ongoing growth inducement strategies.
Chicago Mercantile Exchange (CME)
Dubbed the ideal option for institutional investors interested in crypto derivative products, CME remains one of the contributing factors to crypto mainstream adoption. Its existing status in the traditional finance terrain has played a pivotal role in its growing dominance in the crypto derivatives market. The exchange momentarily emerged as the largest bitcoin futures exchange in December only to slip to 4th place following the explosive rise of the market shares of OKEx, Binance, and Bybit.
It is also worth mentioning that the crypto derivatives trading activities recorded on CME reflect the demand for crypto products by institutional traders. However, this notion might become redundant in the coming months as CME plans to launch Micro Bitcoin futures suitable for retail clients.
Much like the exchanges listed above, Huobi delivers a wide array of trading options that are available globally. Huobi’s growing appeal boils down to its capacity to process high volumes of trades without worrying about slippages. It has ensured that this same high level of liquidity reflects in its derivatives market as the exchange records an average trading volume of $22 billion. Also, it has its standard maker and taker fees set at 0.02% and 0.04% respectively.
In terms of open interest, Huobi ranks as the 5th largest Bitcoin futures exchange, according to the data from skew.com. The exchange currently boasts an open interest of $2.4 billion for BTC futures, representing 10.79% of the global Bitcoin futures market.
Deribit is another high flyer in the emerging crypto derivatives market. Like Bybit, Deribit is one of the few prominent exchanges that focus solely on providing crypto derivatives products. Note that Deribit features just 33 Bitcoin and Ethereum derivatives products. Nonetheless, it remains one of the most prominent options for both retail and institutional traders. Besides, the possibility of opening anonymous accounts makes it appealing to privacy-focused traders.
According to Coingecko, Deribit processes over $1 billion worth of trading volume daily, thereby cementing its place in the top 10 list of crypto derivatives exchanges by volume. More importantly, it accounts for $1.6 billion worth of bitcoin-futures open interest and averages $1.8 billion 24-hour open interest. Therefore, Deribit is the 7th on the list of the top 10 bitcoin futures market and top 10 crypto derivatives exchanges by open interest.
With its 24-hour open interest averaging $5.2 billion, FTX provides sophisticated trading tools for over 150 perpetual and quarterly futures markets. Although it is a relatively new exchange, it has positioned itself for unprecedented growth by delivering consumer-centric and innovative products ranging from the basic to the highly technical. For example, Move, one of its derivative products, allows users to speculate on the daily, weekly, or even quarterly changes in the price of cryptocurrencies.
As a result of FTX’s penchant for innovation, the exchange has emerged as the 6th largest Bitcoin futures exchange globally, accounting for over 10% of the global bitcoin-futures open interest of $22 billion.
Once the largest crypto derivative exchange, Bitmex excelled as one of the long-standing privacy-focused crypto derivatives markets available globally. However, due to the increased regulatory scrutiny, Bitmex has begun to enforce KYC requirements on users. As a result, it has since lost a large percentage of its market share to competing platforms.
Notwithstanding, Bitmex has managed to stay in business. It currently processes an average of $3.8 billion worth of volume daily and boasts a 24-hour open interest of $1.9 billion. Notably, a significant share of this 24-hour open interest (specifically $1.4 billion) is generated in Bitmex’s bitcoin futures market.
Kucoin was launched in 2017, and it officially ventured into the derivatives market in 2019. In that time, Kucoin has made a name for itself as a sound and competently managed digital asset trading platform. For its derivatives market, Kucoin has introduced 3 types of products designed to cater to a broad base of investors regardless of their technical prowess. The first is ideal for new traders, the second product appeals to professional traders, while the third introduces a gamified futures trading system.
Owing to the versatility of this suite of services, Kucoin has emerged as one of the derivative exchanges of choice for crypto traders. This is evident in the considerably high 24-hour trading volume ($1 billion) and 24-hour open interest ($14 billion) of the Kucoin futures market.
According to Coingecko, Bitfinex offers 22 crypto derivative products, and yet it continues to compete with platforms with more versatile offerings. It is also worth mentioning that the exchange’s success is deeply rooted in its penchant for providing functional and sophisticated trading tools. The exchange has strived to create an enabling and secure environment for its users.
For now, Bitfinex focuses on Bitcoin and Ethereum derivatives products, which is why it is the 9th largest bitcoin futures exchange with an open interest of $700 million. In total, Bitfinex registers a 24-hour open interest of $1.1 billion thereby placing it 10th overall in our list of the largest crypto derivatives exchanges.
Judging by the explosiveness of the crypto derivatives market in 2021, it is safe to say that crypto exchanges will continue to experiment with new products in hopes of attracting more investors. We expect this growth potential to spur regulators to take decisive actions against overly risky derivatives practices. It remains to be seen how the influx of regulations would affect the current distribution of the crypto derivatives market shares.