- Deribit, the largest cryptocurrency exchange for options, continues its plans to offer more coin contracts to customers despite a decrease in volatility in digital assets.
- The Panama-based company plans to move to Dubai, a crypto-friendly jurisdiction, after obtaining the necessary license. Deribit currently has 115 employees and plans to hire an additional twelve.
- Deribit holds approximately 85% of the options market share, with competitors like OKX, Binance, and Bybit making up the rest, according to information provided by the firm.
Deribit, the largest cryptocurrency exchange for options, plans to launch options trading for Solana, XRP, and Polygon in early 2024.
Deribit Takes Action for SOL, XRP and MATIC
Deribit, the largest cryptocurrency exchange for options, plans to launch options trading for Solana (SOL), Ripple Labs’ associated token XRP, and Polygon’s MATIC in January 2024. Luuk Strijers, Chief Trading Officer, said that the lack of volatility would not hinder their plans, and the company would also apply for a brokerage license in the European Union.
Strijers stated, “The question for us is, ‘Is this the best time to launch new products, or should we delay?’ What keeps us awake at night is this.” He added, “When we launch options on altcoins in January, I expect increased volatility.”
Crypto derivatives trading volume has declined from approximately $2 trillion at the beginning of this year to around $1.5 trillion in September, suffering due to the low prices of digital assets and low volatility compared to the highs of 2021.
Investors hope to bring back volatility to the digital asset market, anticipating the approval of future Bitcoin spot ETFs, and the launch of newly introduced Ether futures exchange-traded funds (ETFs) by U.S. regulators.
Deribit’s expansion will take it beyond Bitcoin, Ethereum, and USD Coin options. The Panama-based company plans to move to Dubai, a crypto-friendly jurisdiction, after obtaining the necessary license. Deribit currently has 115 employees and plans to hire an additional twelve.
Sharp Decline in Volatility
Implied volatility indicators for the top two tokens like Bitcoin and Ether continue to hover near all-time lows. The T3i Bitcoin Volatility Index, a measure of the token’s expected 30-day fluctuations, is at around half of its 2023 high level. A similar indicator for Ether has declined by over 50% during the same period.
Richard Galvin, founder of Digital Asset Capital Management, said, “Volatility has been consistently decreasing for the past year.” He added that altcoin options would help when it is no longer an effective hedge for a diversified crypto assets portfolio, owing to Ether’s relatively low volatility.
Deribit’s options market share is approximately 85%, with competitors like OKX, Binance, and Bybit making up the rest, according to information provided by the firm. Around 85% of the company’s volume comes from institutional customers.
Crypto Derivatives Trading Volumes
Deribit launched a platform for zero-fee spot crypto trading in early 2023. Strijers said the goal was to facilitate derivatives trading rather than enter the token trading business:
“So we’re doing this for free, not because we don’t like potential revenues, but because we primarily aim to generate revenue through derivatives trading.”
