The surge in crypto derivatives trading is likely to continue amid the bull market.
Some of the biggest names in blockchain have thrown their weight behind a new cryptocurrency derivatives exchange, signaling that the next bull market could be driven by institutional investors.
Crypto derivatives platform Globe has raised $3 million in seed investments to launch its Globe Derivative Exchange. The new platform is aimed at bringing institutional investors into the world of cryptocurrency. Early-stage investors in the new venture include billionaire Tim Draper, blockchain investment fund Pantera Capital and venture capital firm Y Combinator.
Pantera executive Paul Veradittakit cited growing institutional interest in crypto as one of the primary reasons why his company decided to invest in Globe.
In a quote shared with Cointelegraph, Veradittakit said:
"We’re seeing a wave of interest in crypto assets from major banks, fintech companies, and portfolio managers. Globe has built the platform and products that these sophisticated market players need and expect. […] We’re excited to support the Globe team in delivering a next-generation platform for the crypto financial system."
Globe has developed its own matching and risk engine, which it calls Thor. The company claims that Thor was built by engineers from major financial services firms including JPMorgan Chase, BofA Securities, Citibank, UBS and Getco.
Trading in crypto derivatives has exploded this year, with the likes of BitMEX, HuobiDM, OKEx and Binance futures seeing a large uptick in volumes. The derivatives surge is just one of many ways the digital asset industry has evolved from just three years ago.
A recent report from cryptocurrency exchange Kraken finds that derivatives are “now at least 4.6x the size of spot volume” and that this trend is expected to continue.
Kraken says the use of leverage is one of the biggest draws of derivatives platforms. On its official website, Globe claims to offer free leverage of up to 100 times.