Binance, the world’s second-largest cryptocurrency exchange by trading volume, has announced it is to launch a derivatives trading platform as early as next month.
In a 46 minute broadcast on Twitter earlier on Wednesday, founder and chief executive Changpeng Zhao, said: “Futures is going to be the next thing that comes out very soon.”
— Binance (@binance) August 28, 2019
Indeed, Zhao – known to the crypto universe as CZ- first announced plans to launch a futures trading platform in late June at the Asia Blockchain Summit in Taipei. It was at this event that he gave attendees a little taste of what the plaform would look like.
.@cz_binance just announced that #Binance will offer futures contracts in his keynote at the @aba_summit! #ABS2019 #Taipei #Futures pic.twitter.com/RXlui8YY0V
— Binance (@binance) July 2, 2019
It was revealed that the platform would initially only support the bitcoin/tether (BTC/USDT) cryptocurrency pair, however, more pairs would be added, CZ said. The platform will initially offer leveraged trade of up to 20 times.
Derivative Backlash
Regulators in some countries have voiced opposition to trading of cryptocurrency derivatives such as futures, options and contracts for difference. The UK’s Financial Conduct Authority has suggested it may ban some such derivatives from being sold to retail investors as they are too complex and volatile.
Some observers, however, believe the market is set for massive growth and in late June CME Group reported record trading volumes in bitcoin futures. BitMEX – the biggest crypto-derivatives exchange by trading volume reported at the same time that it had totalled more than $1 trillion in futures trading volumes over the past year.