Has the cryptocurrency derivatives market found its home in Asia?
For cryptocurrencies such as Bitcoin, 2019 saw increased growth and interest in its derivatives market as major institutions started to back digital assets like the king coin as legitimate forms of long-term investment. In terms of the derivative market and cryptocurrencies in general, different parts of Asia have now become dominant hubs in the crypto ecosystem across the world.
Speaking on the Flippening podcast, Joyce Yang, founder & CEO of Global Coin Research, highlighted how Asia has risen to prominence with large derivative exchanges operating out of the continent and how in the past few years there has been an explosive growth of derivatives trading. Highlighting the role of India and countries like Singapore to name a few within Asia, Yang said,
“The trading market as well as the lending market being kind of driving forces in Asia and is kind of pushing the industry along. And that together over time has convinced me that Asia has one of the most robust hubs for crypto and blockchain.”
Sam Bankman-Fried, CEO of FTX, earlier in the year had expressed how the Asian market is quite different from that of the US. He pointed out in Asia derivatives exchanges like OKEx and others are a lot more efficient in onboarding retail traders when compared to the U.S. market, which is better suited for financial institutions. He noted,
“One of the structures is very much designed for crypto-native traders and retail traders to be up and running quickly, and the other is very much designed for Wall Street institutions to be able to easily and seemingly safely interface with.”
In terms of the market, Yang also suggested the importance of robust regulation and how certain regulations in the US and Europe are now driving more entities east-ward, she pointed out that,
“Spotlight in trading this year has been derivatives and leverage trading, honestly, and that’s happened a lot and mostly in Asia. If you look at regulations, it’s been stifling the development of retail derivatives and futures platforms in the US… the new rule around crypto regulations is pushing European trading firms towards Asia.”