In early October, the cryptocurrency market faced extremely volatile economic conditions, mainly due to a recent lawsuit against BitMEX, as a result of which the US Commodity Futures Trading Commission brought the company’s senior executives to justice on multiple charges. Not only that, but just days before the BitMEX scandal broke, on September 26th, the KuCoin cryptocurrency platform was hacked with more than $ 275 million.
Amid all this, the cryptocurrency derivatives market has also seen a major development in the form of Binance, which overtook Huobi and OKEx to become the largest cryptocurrency derivative exchange by volume in September, with a platform recording total trading volume. $ 164.8 billion per month.
Data released by UK-based crypto analytics company CryptoCompare took turnover on listed exchanges into account and found that Binance raised $ 8 billion in trading volume more than its closest competitor Huobi, which raised $ 156.3 billion. During the same period, OKEx withdrew approximately $ 155.7 billion.
Binance and OKEx showed relatively similar derivative volumes in July and August; However, it should be noted that at the same time, Huobi had a rather significant lead over its closest competitor. This raises the question of how Binance managed to make such a breakthrough in just one month, overtaking Huobi and OKEx so quickly. OKEx CEO Jay Howe shared his thoughts on the topic in an interview with Cointelegraph:
In September, Binance held a $ 1.6 million futures exchange trading contest to celebrate its anniversary. This could lead to a sudden and rapid increase in volume, and also explained why OI was lower compared to OKEx, as traders weren’t long gone but were fighting for their share of the prize pool. ”
What led to the emergence of Binance Future?
One of the main factors that helped spur recent developments in the market was user feedback, according to a Binance spokesperson, especially given the incomplete trading experiences many clients previously had on other derivative exchanges: “They told us about system glitches or not. Its stability. Uncomfortable interfaces and the fact that all exchanges were only stimulating market producers, creating a distorted environment that made it difficult for market participants to operate. ”
Another event that could boost market confidence in Binance derivatives is Black Thursday, or March 12th, a day that had a major impact on the traditional currency and cryptocurrency markets. While many other derivative exchanges experienced major turmoil, Binance has provided clients with seamless service and thus potential confidence in the platform.
Finally, this summer, a number of users switched from Bitcoin to various altcoins and DeFi-based derivatives. In this transition period, Binance Futures has expanded its offerings. A Binance spokesperson commented, “We also understand better how to balance Bitcoin and altcoins; the volume of Altcoin futures on Binance is around 40%. We believe we understand and reflect market conditions well.”
OKEx is preparing to return
Whereas in September, Binance led the derivatives, and in October OKEx topped all bitcoin futures exchanges when it came to opening Bitcoin futures contracts. In its most basic sense, open interest rate refers to the total number of existing derivative contracts – be it options or futures contracts – that have not yet been settled. Technically speaking, open interest rates act as an indicator of trading activity and an increase in the total amount of funds entering the derivatives market.
On October 4, OKEx’s 24-hour trading volume exceeded $ 1.3 billion, far more than its closest competitor, Binance Futures, at $ 1.23 billion. Additionally, as shown in the chart above, the open interest rate on OKEx is the highest by a wide margin, with the other five exchanges being similar.
Such positive statistics seem to indicate that BTC futures and options have remained very strong despite the recent BitMEX lawsuit and the KuCoin hack. Moreover, open interest rates for OKEx futures have jumped from $ 850 million to $ 930 million since early October, which could be a sign of an upward movement in the near future. Howe told Cointelegraph that he shared his understanding of the topic:
“Volume is a very important math, but it’s not the only calculation that should be taken into account when thinking about the general health and popularity of the stock market. OKEx has also focused on DeFi recently, and this move from Binance to derivatives is a signal to us that we cannot be distracted.