Number of futures on Binance is growing exponential - icoinic
Franklin Feringa - Fundamental Analyst - Icoinic B.V.
Franklin Feringa

Number of futures on Binance is growing exponential

Recently, Icoinic published an article regarding derivatives in the cryptocurrency market. In that article, it was discussed how derivatives are expected to make a positive impact with regard to the maturity of the market in due time. Progress on this front is happening faster than a lot of people expect. Up until recently, derivatives were only available for some of the majors in crypto. Bitmex, for example, offers derivatives for merely eight cryptocurrencies in total. 


In the near future, a lot more derivative products will become available to traders/investors. A good example of this is the recent developments seen at Binance which has become increasingly focused on listing futures for its users. 

BTC/USDT futures

The first futures contract that Binance announced was, unsurprisingly, BTCUSDT, which was first tradable on the 9th of September. Launching the futures pair has been nothing short of a success as Binance saw the percentage of BTC volume traded in futures overtake the volume traded in the spot market. Just how quickly this happened can be seen in the chart below:

Spot vs futures percentage

Futures trading has overtaken the spot market with well over 75% of the BTC trading volume now being derived from futures trading. At the same time, the overall open interest of the futures has steadily been on the rise as well with no real show of any weakness. 

BTC vs USDT amount

After seeing the success, two more majors were added. An ETHUSDT futures was added to the platform on the 29th of November, while a BCHUSDT pair was added on the 19th of December. Their results were similar to BTCUSDT earlier as both pairs saw around 70% of their trading volume being derived from futures instead of the spot market. 

Stepping up futures launches

Altcoin announcementAs Binance experiences the success of the launch of its first three futures pairs, the exchange announced that it would expand on this market with the addition of EOSUSDT and XRPUSDT. However, since the beginning of this year, Binance has aggressively increased its expansion efforts. Binance was already a market leader in altcoin spot trading. Now, it aims to become the market leader in futures trading as well. It has the means and the customer base to do so.

New futures are being added every single day now, with the total number of futures pairs currently standing at 21, a lot higher than the 8 that Bitmex has or the 9 that OKEX and Huobi have. Currently, 10 futures pairs have already been added in February while we are just halfway through the month. It looks like Binance is aiming to list at least the top 25 cryptocurrencies as futures pairs. But I would not expect them to simply stop there. Lately, the entire market has become extremely bullish again with more extreme price movements expected ahead. Binance will likely want to get the most out of the coming period by making its platform as attractive as possible for traders. So it would not be unsurprising if the exchange expanded beyond the top 25 cryptocurrencies. 


Icoinic Binance Leverage

Faster change than expected

At the time that the previous article about derivatives was written, Binance still only had about 6 or 7 futures pairs launched. As mentioned in the previous article: derivatives in the cryptocurrency market will make it easier to regulate and thus open it up to institutional investors. An increasing number of futures pairs becoming available to traders means that these institutional investors will have more products to choose from instead of just a couple of the larger ones. 

Therefore, the increased focus of Binance on the futures market will likely have a very positive effect for the entire cryptocurrency market. This change has been coming a lot faster than most people expected

Arthur Stolk