2020 Cryptocurrency Futures Exchange Industry Report
Overview
The scale of the crypto futures market grows rapidly in 2020. The annual market volume exceeds $12,314B, meanwhile the market-wide futures contract open interest rises from $3.51B to $17.03B at the end of the year, an increase of 384.9%. Because of the continuously updating all-time-high of BTC and ETH prices in Q4, the quarterly trading volume of crypto derivatives in 20Q4 reaches $5,350B, an increase of 98.1% compared to Q3, and the quarterly trading volume of futures surpasses spot for the very first time ($4,9980B).
Reviewing the futures market throughout the year, there are two phenomena we have seen. First, the leading exchanges are paying more and more attention to futures contracts. Binance, Huobi, and OKEx have all achieved the mainstream crypto futures contracts (Coin- margined and USDT-margined) this year. The second phenomenon is that the market share of perpetual contracts has increased significantly, from 39% in Q1 to 84% in Q4.
In terms of futures exchanges, BitMEX experienced serious loss of users due to compliance issues, and its annual transaction volume have no significant increase. On the contrary, Bybit and FTX achieve rapid growth, and their market share increased significantly in 2020. Bybit’s quarterly trading volume exceeds BitMEX in 2020Q4.
With the refinement of regulation and product innovation, the competitive landscape of the crypto market has also undergone certain adjustments. As institutional investors begin to allocate cryptos in their portfolios, compliant exchanges are clearly more in line with the needs of institutional investors. On December 31, 2020, the Chicago Mercantile Exchange (CME) became the platform with the largest BTC futures open interest in the market.
In terms of the proportion of the mainstream futures, because of DeFi’s booming in 20Q3, the proportion of BTC futures market drop sharply. In Q4, although the whole market is flourishing, BTC futures trading volume just accounts for about 63% of the total market trading volume.
The improvements of products on different platforms indicate more intense and even straightforward competition among crypto exchanges in 2021. The competition in profits makes the platforms usually neglect user education, overemphasize the profits, and use the data from some profitable users to attract other users. However, the essence of exchange is only platform provider. Whether users’ win or lose, there is no difference for exchanges indeed. Profit-dominated operation not only reduces users life, but leads to an unhealthy structure of users, which is unsustainable.
With the improvement of products in large-scale exchanges, the opportunity to stand out against others by relying on special products will gradually decrease, and the head effect of exchanges will intensify further. In the future, the competition between exchanges will revolve around the following three types of exchanges: existing large crypto exchanges, exchanges established by traditional institutions after acquiring licenses, and decentralized exchanges.
Now you can visit TokenInsight official website to view real-time trading data on different exchanges and different cryptos in the secondary market. For more data on the crypto futures market in 2020, Please Enjoy the Report.
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