Investors Can Hedge Long-Term Risk With New 2-Year Bitcoin Derivatives

triggered mass sell-offs across both traditional and crypto markets. Contrary to the widely held safe-haven narrative, bitcoin’s (BTC) price dropped to a 10-month low on Thursday, taking many traders completely unawares. Forced liquidations of long positions on derivatives exchange BitMEX have soared past $700 million, adding further downward pressure to the spot price.

While volatility is likely to continue for contracts with short term expiries, Gromniak attributes surging interest in his longer-dated products to investors trying to hedge their long-term exposure. Contracts with longer expiry dates, such as in two years’ time, are not influenced by market downtrends such as the one sparked by the coronavirus, he said.

Previously, exchanges OKEx and FTX had the longest-reaching contracts that expired in December 2020. The longest contracts available on Deribit lists expire in September. Gromniak said Quedex would consider adding contracts with even longer expiration dates, but added the company would wait to see first if there was sufficient demand from the market.

Disclosure strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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