Best Crypto Derivatives Exchanges In 2020

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Bitcoin and crypto derivatives are quickly becoming the way of life for serious crypto traders.

Why not also when applying derivatives to volatile asset-class like crypto is so rewarding!!

Chances are, you too are looking to take advantage of Bitcoin and crypto derivatives products. If that’s the case, I must say you are in the right place.

TheMoneyMongers have been tracking several cryptocurrency derivatives products and exchanges to conclude that not all Bitcoin derivatives exchanges are made equal.

So you mustn’t get tricked by the vague language these derivatives exchanges of different cryptocurrencies use and levergae our wisdom to make the correct choice.

Here you go to find the best Bitcoin derivatives exchange of 2020:

Top 6 Best Crypto Derivatives Exchanges 2020

If you are a first-timer and aren’t aware of crypto derivatives, I urge you to do so and get used to the concept soon by skipping directly to this section.

#1. ByBit

At first look of the website, it seems like a gaming website, but hell no.

It’s a Singapore-based crypto derivatives exchange launched in March 2018. It offers crypto-based perpetual contracts and primarily specializes in crypto-to-fiat perpetual contracts with 100:1 leverage.

In just a short period, ByBit has emerged as a popular choice among crypto derivatives traders and managed to build-up enough liquidity.

Let’s look at some of the features of Bybit:

  • State of the art matching engine: The platform can support up to 100,000 transactions per second, which is ten times the industry’s speed. And, each transaction is settled within 10 microseconds.
  • Asset security: All the funds are kept safe in a hierarchical deterministic cold wallet system, and manual withdrawals are processed three times a day.
  • Deposits and withdrawals are supported in BTC, ETH, EOS, and XRP
  • No server downtime

Check Out ByBit Derivatives Trading

#2. BitMEX

Shining like a beacon, BitMEX has alone carried a load of crypto derivatives trading since 2015.

Of course, now new players have entered the market of crypto derivatives, but in terms of brand name and liquidity, they yet have to challenge BitMEX.

BitMEX offers the best Bitcoin derivatives products with negligible slippage and high liquidity. Moreover, the sign-up process is easy and requires just your email ID.

Bitcoin is the main base currency on this exchange, where you will get an exclusive 10% discount on trading fees for the first six months if you register NOW.

Moreover, it is the perfect place to deal with cryptocurrency derivatives because it offers derivatives for seven more cryptocurrencies apart from Bitcoin.

Check Out BitMex Derivatives Trading

#3. PrimeXBT

PrineXBT is a new and upcoming crypto derivatives exchange where you will not be required to worry about the liquidity.

This crypto derivatives exchange has rapidly started scaling in 2019, and for many serious derivative traders have become a go-to platform.

I have also placed a couple of trades on PrimeXBT, and I found their UI to be intuitive. Furthermore, it is also a Bitcoin-based derivatives exchange that allows you to trade over 30+ assets, including Crypto (Bitcoin, Ethereum, Litecoin, Ripple, EOS), and much more.

To start with, you only need your email ID, and there are no KYC requirements as such. You can execute five types of advanced orders to long or short different cryptocurrencies, including stock indexes (S&P500, FTSE100), commodities, and forex all in one place.

Try PrimeXBT Now

#4. Derbit

Derbit is a high-performance crypto derivatives exchange unlike any other.

It is serving the crypto derivatives market since 2015 and is super specific in doing what it does. It has a decent share of whale crypto derivatives traders.

In terms of fees and ease of sign-up, it is similar to BitMEX, but in terms of liquidity, it is a bit less but still does a decent job. Moreover, you will find options derivatives also here, which are hard to find.

It also follows the maker and taker model to allow you to trade Bitcoin and Ethereum derivatives, which you will not find in other places.

Lastly, trading on 100x leverage is the best part of crypto derivatives trading because you are not required to pay a considerable sum upfront to get your actual exposure.

Try Derbit Now

#5. Binance

Binance is the most famous brand when we talk about cryptocurrency trading, specifically spot trading.

Binance is serving the crypto markets since 2017, and recently it has launched its derivatives products also to lure the breed of traders who want to hedge or speculate on a higher level.

Binance provides up to 125x leverage on your crypto derivatives futures product and a 50% trading fee discount for the first three months.

In terms of trading fees of crypto derivatives, too, Binance is pretty decently placed.

But as of now, Binance only offers one cryptocurrency, i.e., Bitcoin. So you can only trade derivatives of Bitcoin in BTC/USDT pair, but the volume/liquidity of this pair is quite high, and that’s what you want when trading derivatives.

Try Binance Now

What Is Bitcoin & Cryptocurrency Derivatives Trading?

Real money is being made in cryptocurrency derivatives trading. By now, I believe you have already sensed this, and the fact you are here tells me about your interest.

For the uninitiated:

Derivatives have existed for a couple of centuries and are financial instruments that allow you to hedge or speculate based on the future price of an asset.

Derivatives derive their price from the underlying asset, and this underling can be stocks, bonds, forex, commodities, or cryptocurrencies too now.

There are a variety of derivatives (futures, forwards, options, swaps, etc.) that give the buyer or seller different kinds of rights as well as obligations to exercise based on the price movements of the asset under question.

When this concept of derivatives is applied to Bitcoin and other cryptocurrencies, you get what Bitcoin or crypto derivatives are.

These are tradable of cryptocurrency derivatives exchanges, and since the asset class is only a decade old, the derivatives of this asset class, too, are pretty new.

For example, the most popular type of crypto derivatives is the Bitcoin futures contract.

Using this, a trader can hedge his/her portfolio risk. Let say, for example, this trader is excellent in sentiment and technical analysis. According to him, the price of BTC is going to fall 50% in the coming three months.

Right now, the Bitcoin is trading at $10,000 per BTC, and knowing; there is a good chance of BTC reaching around $5000 per BTC, the trader would want to hedge the risk of just holding his coins.

In this case, the trade goes short and buys Bitcoin short contracts of 3 months expiry date. This will allow him to sell his holdings at $10,000 BTC even if the price is $5000 at the time of contract expiration.

After three months at expiry, BTC is actually at $5000.

Now, you must be thinking who will buy at this price?

Well, the other party who has sold these short contracts is legally obligated to buy bitcoins as per the agreed price in the contract. Do note, the seller of these short contracts was bullish and long on Bitcoin !!

This way, the smart trader saved himself $5000 per BTC buy trading the derivatives of Bitcoin, which are deriving its price from the underlying price of actual Bitcoin.

How To Invest or Trade-In Bitcoin & Crypto Derivatives

Bitcoin and crypto derivatives are often referred to as going long or short on Bitcoin or other cryptocurrencies.

Remember, it is no easy feat to time and analyzes the wild world of cryptocurrencies, but having access to the best crypto derivatives exchanges can resolve a lot of friction.

Also, since the asset class is to volatile, even a second’s miss can cost you a considerable sum of money, especially when you are trading Bitcoin or crypto derivatives on margin.

That’s why it is only recommended to trade on specialized exchanges which are having a dedicated infrastructure for crypto derivatives trading.

The process to get started is similar to spot trading exchanges and only requires your email ID registration, to begin with. There are no mandatory KYC requirements, too, in some derivatives exchanges.

So, if you are looking for a single recommendation, I suggest you go for ByBit exchange, which has huge liquidity as well as a long-standing reputation of servicing customers of crypto derivatives trading !!


Sudhir Khatwani

Hey there! I am Sudhir Khatwani, an IT bank professional turned into a cryptocurrency and blockchain proponent from Pune, India. Cryptocurrencies and blockchain will change human life in inconceivable ways and I am here to empower people to understand this new ecosystem so that they can use it for their benefit. You will find me reading about cryptonomics and eating if I am not doing anything else.

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