Crypto derivative exchanges are quickly becoming the way of life for serious crypto traders.
Why not also when applying derivatives to a volatile class like crypto is so rewarding!!
Chances are, you, too, are looking to take advantage of derivatives products based on crypto assets. If that’s the case, I must say you are in the right place.
TheMoneyMongers have been tracking several cryptocurrency derivatives exchanges and to conclude that not all are made equal.
So it would be best if you didn’t get tricked by the vague language these derivatives exchanges use and use your wisdom to make the correct choice.
Here you go to find the best crypto derivatives exchanges:
(2021 Editor's Choice)
Get $90 Joining Bonus
- Can also trade with Forex, Commodities, Indices
- No-KYC Exchange
Get +35% on Your First Deposit
- Deposit in: Bitcoin, altcoins and fiat
- Native mobile app
Top Crypto Derivatives Exchanges
|Best Crypto Derivatives Exchange||Quick Links|
|ByBit [Get Deposit Bonus upto $1010]||Try Now|
|FTX Exchange||Try Now|
|PrimeXBT [100x Leverage]||Try Now|
|Binance Futures||Try Now|
At first look at the website, it seems like a gaming website, but hell no.
It’s a Singapore-based crypto exchange launched in March 2018. It offers crypto-based perpetual swaps as well as futures contracts.
But it primarily specializes in crypto-to-fiat currency pairs perpetual contracts with 100:1 leverage all the major cryptocurrencies to help you trade derivatives that are highly liquid.
In just a short period, the ByBit platform has emerged as a popular choice among cryptocurrency traders and managed to build up enough liquidity.
During our detailed analysis of Bybit Exchange, few features which make ByBit really stood out from others:
- State of the art matching engine: Bybit exchange platform can support up to 100,000 transactions per second, ten times the industry’s speed. And each transaction is settled within 10 microseconds.
- Security of assets: All the funds are kept safe in a hierarchical deterministic cold storage system, and manual withdrawals are processed three times a day. But for additional security, it is recommended to use two-factor authentication while using Bybit.
- Deposits and withdrawals are supported in BTC, ETH, EOS, and XRP
- There is no server downtime on the web app, but it also has active mobile apps for iOS & Android devices.
FTX is another exchange that supports the derivative trading market by providing futures contracts, swaps, options, Move Contracts, and leveraged tokens.
FTX came to the crypto contracts market in 2019 and has quickly risen to the top five crypto exchanges that provide leverage.
Needless to that, FTX has opened the access to market for beginners as well as experienced crypto traders who otherwise have struggle for more equitable opportunities.
FTX also allows its users to trade the prediction markets and help you earn interest on your dormant lying cryptos on its platform.
FTX follows the fee model of market takers and market makers, where takers are charged 0.07% & makers are charged 0.02%.
But this trading fee can be significantly reduced upto 60% depending upon how many FTT tokens one holds. You can read more about FTX trading fees and platform in our dedicated review here.
PrimeXBT platform is a new upcoming and popular crypto exchange where you will not be required to worry about liquidity.
This cryptocurrency derivatives exchange has rapidly started scaling in 2019, and for many serious derivative traders, has become a go-to platform.
I have also placed a couple of trades on the PrimeXBT exchange, and I found their UI intuitive.
Furthermore, it is also a Bitcoin-based exchange that allows you to trade crypto assets with over 30+ assets, including cryptocurrencies (BTC, Ethereum, Litecoin, Ripple, EOS, Bitcoin Cash), and much more.
You only need your email ID to start with your account, and there are no KYC requirements.
Users 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.
But you should know that it is more like a CFD market for cryptocurrencies for traders rather than a futures market.
4. Binance Futures
Binance futures exchange is a great platform for crypto trading.
Binance is one of the most famous brands for cryptocurrency trading, specifically spot markets for beginners and institutional traders. But now, they have introduced a futures contract on all the big trading pairs of crypto space.
Binance exchange has been serving the cryptocurrency markets since 2017. It has recently launched its products to lure the breed of traders who want to hedge or speculate on a higher level.
With Binance Futures, you can access up to 125x leverage on cryptocurrency futures products. In terms of trading fees of cryptocurrency derivatives, too, Binance is pretty decently placed.
Binance now offers active derivative products of over 100+ trading pairs for interested market takers and makers.
Binance has started offering crypto options products too for options traders and allows funding of traders’ accounts with fiat currencies using any popular debit card.
Apart from allowing trading of futures, swaps, and options, Binance also allows traders to stake cryptocurrencies on its platform to earn interest.
Many derivative exchanges have come and gone, but shining like the beacon, the BitMEX platform has alone carried the load of the derivatives market since 2015.
Of course, now new players have entered the crypto market, but in terms of brand name and liquidity- BitMEX still stands in the top ten platforms in the derivatives market.
BitMEX exchange offers the best crypto 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 and open your account.
Moreover, it is the perfect place to deal with cryptocurrency because it offers derivatives for seven more cryptocurrencies apart from BTC.
Derbit platform is a high-performance crypto derivatives trading platform unlike any other which allows you to trade futures and perpetual contracts, i.e., swaps with leverage.
It is serving the cryptocurrency options and futures market since 2015 and is super specific in doing what it does.
It has a decent share of whale cryptocurrency traders because it was one of the first derivative exchanges to allow crypto options products for crypto traders.
And its popularity amongst options traders can be gauged by the volume of open interest Deribit has at any point.
In terms of fees and ease of sign-up, it is similar to BitMEX exchange, but in terms of liquidity, it is a bit less but still does a decent job. Moreover, you will find crypto options also here, which are hard to find.
It also follows the maker and taker model to allow you to trade BTC and ETH futures, swaps & options, which you will not find in other places.
Lastly, trading on 100x leverage is the best part of the crypto market because you must not pay a considerable sum upfront to get your actual exposure.
What Is Cryptocurrency Derivatives Trading?
Real money is being made on crypto derivatives exchanges. By now, I believe you have already sensed this, and the fact you are here tells me about your interest.
For the uninitiated:
Derivatives investing has existed for a couple of centuries on a wide variety of products. Derivatives are financial instruments that allow users to hedge or speculate based on the future price of a cryptocurrency.
They derive their price from the underlying asset, and this underling can be stocks, bonds, forex, commodities, or cryptocurrencies.
A variety of them (futures, forwards, options, swaps, etc.) give the buyer or seller different kinds of rights and obligations to exercise based on the asset’s price movements under question.
When this concept is applied to any crypto, you get what cryptocurrency derivatives are. These are tradable from cryptocurrency derivatives exchanges, and since crypto is only a decade old class.
For example, the most popular type of cryptocurrency derivative is the BTC futures trading through BTC futures.
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.
The Bitcoin (BTC) is 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 BTC short contract 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?
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 BTC !!
This way, the smart trader saved himself $5000 per BTC by trading the derivatives of Bitcoin, which are deriving its price from the underlying price of actual Bitcoin.
How To Trade Them?
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 this class is to volatile, even a second’s miss can cost you a considerable sum of money, especially when playing on margin.
That’s why it is only recommended to trade on a specialized exchange with a dedicated infrastructure for cryptocurrency trading.
The process of opening your account is similar to spot trading and only requires your email ID registration, to begin with. There are no mandatory KYC requirements, too, on some platforms.
So, if you are looking for a single recommendation, I suggest you go for the ByBit exchange, though there are other platforms.
But Bybit has huge liquidity and a long-standing reputation of servicing 300,000+ traders of futures contracts like such products with advanced features !!
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