Bullish Sentiment Restores in Crypto Derivatives Markets, Surged to $3.12 Trillion in July

Investors in the cryptocurrency ecosystem have increased their exposure to derivatives markets, with trading volume on central exchanges rising to $3.12 trillion in July, up 13% from the previous month, according to researcher CryptoCompare.

Derivatives trading volume on major exchanges hit the $245 billion mark on July 29, up 9.7% from its daily high of $223 billion throughout June, according to CryptoCompare data.

The move was marked by signs of recovery from a crash in futures/options contracts.

Crypto derivatives are secondary contracts or financial instruments whose value is derived from a primary underlying asset such as Bitcoin (BTC), Ethereum (ETH), or other alternative currencies.

Futures are investment contracts that enable investors to gain exposure to an asset without owning it directly. Futures allow traders or investors to speculate on the future price of the underlying asset.

Options offer traders a unique opportunity to buy or sell crypto tokens at a price. The price of an option contract will vary depending on the time of purchase, the strike price, and the day of expiry. 

CryptoCompare states, “the rise in derivatives trading volume indicates an increase in speculative activity as traders believe there is room for further upside in this rally.”

Previous Fed rate hikes, inflation, and the war between Ukraine and Russia triggered investors to sell cryptocurrencies sharply, causing the cryptocurrency market to plummet.

Lower-than-expected inflation data from the United States boosted market risk appetite, and cryptocurrencies have now recovered.

Bitcoin (BTC) quickly crossed $24,000, and Ether (ETH) also managed to climb back above $1,900 during the intraday.

CryptoCompare pointed out that the market is also concerned about the potential market for the upgrade and merger of Ethereum. This upgrade is expected to increase the network rate of Ethereum, which may help Ethereum to strengthen.

So open interest for ETH derivatives is higher than BTC for the first time.

Derivatives market volume now accounts for 69% of total crypto volume, up from 66% in June.

The prospect of value-adding derivatives has made them popular among retail and institutional investors. While U.S. law remains largely ambiguous, forays into derivatives markets have been a better investment option for most businesses looking to capitalize on asset price swings to make money.

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Crypto Exchange CEX.IO Named as Top 10 Safest Crypto Exchanges by CryptoCompare

Cryptocurrency exchange CEX.IO is named in the top 10 safest cryptocurrency exchanges by CryptoCompare – the independent global cryptocurrency market data provider, ranking ninth.

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Established in 2013 in the UK as one of the first cloud mining providers, CEX.IO has become a regulated multi-functional cryptocurrency exchange, trusted by over a million users.

CEX.IO offers cross-platform trading via website, mobile app, WebSocket, and REST API, providing access to a high liquidity order book for top currency pairs on the market. Instant Bitcoin buying and selling are available via a simplified bundle interface.

CryptoCompare compared more than 150 global spot exchanges in the current market for a comprehensive assessment in terms of Know-Your-Customer (KYC) or trading risk, asset diversification, market quality, data provision, team/exchange, and security.

The Benchmark assigns a AA – F grade to help identify the lowest risk venues in the industry. CEX.IO received an “A” rating in these categories.

Coinbase scored the highest in CryptoCompare’s latest benchmark, followed by Gemini, Bitstamp, and Binance.

CEX.IO was also recently listed by Forbes as one of the top 20 best cryptocurrency exchanges in the world.

According to the official website, “CEX.IO Limited received a Distributed Ledger Technology (DLT) license issued by the Gibraltar Financial Services Commission (GFSC). CEX.IO Corp. has obtained Money Transmitter Licenses (MTLs) in 26 US states, and keep on working on covering more.”

The security issue of cryptocurrency exchanges has always been a matter of great concern and concern to investors.

The world’s largest cryptocurrency exchange Binance has set up a $1 billion insurance fund for customers to double-protect the platform from hacking attacks.

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Surveillance Firm Launches Launches Push Towards Crypto Market Safety With 16 Other Industry Leaders

New York-based crypto surveillance firm Solidus Labs is teaming up with leading digital asset exchanges, trading firms and industry associations to launch a new crypto market safety initiative.

In a statement, the Crypto Market Integrity Coalition (CMIC) outlines how it will make the crypto market a safer space amid the emergence of new risks.

“The market integrity pledge introduced by the coalition is focused on a commitment to continuously strive towards higher standards of market integrity, risk monitoring, consumer protection and compliance, in order to maintain fair and orderly digital asset markets and prevent market abuse. “

The initiative also wants to engage with regulators to address the challenges in the industry.

“Over time, the coalition will take further steps, including advancing training programs, sharing insights and research, dialoguing with regulators, and considering data-sharing and shared-surveillance frameworks that can address crypto and decentralized finance’s unique cross-market supervision challenges.”

Solidus Labs initiated the formation of the group and co-founded the coalition with 16 other industry leaders, namely Coinbase, Circle Internet Financial, GSR, Huobi Tech, Anchorage Digital, CrossTower, BitMex, Bitstamp, Securrency, Elwood Technologies, CryptoCompare, MV Index Solutions, Global Digital Finance, the Chamber of Digital Commerce, CryptoUK, and Liberty City Ventures.

The CMIC says it is inviting other members of the crypto community to join the coalition.

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Investor Continue Losing Interest on Crypto products in July, Report says

Depressed sentiment continues to override amid investors and the crypto market. A monthly report shows that data of assets under management (AUM) declined 14% compared to the previous month, according to the CryptoCompare report. Meanwhile, the total trading volumes plummeted by 35.4% across all digital-asset investment product markets.

In the July edition of the Digital Asset Management Review released by CryptoCompare Thursday, the report highlights the decline of the total AUM sank by 14.0% to $34.8 billion in the digital asset investment sector, compared to last month.

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image source: CryptoCompare

In terms of company and product, Grayscale’s products continue to dominate the majority of AUM, “occupying more than 80% at $27.9 billion, followed by XBT Provider, taking 7.8% at $2.7 billion and 21Shares weighting for 2.7% of the total with$949 million,” according to the report.

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image source: CryptoCompare

Meanwhile, the aggregate daily volumes across all digital asset investment products types dropped by an average of 35.4% from June to July. The average daily volumes now stand at $319 million.

Yet, the average weekly inflows improved and returned to a positive net inflow of $58.5 million in July, in comparison to net outflows of $59.5 million last month.

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image source: CryptoCompare

The crypto market has lasted a low volatility period for serval weeks. Bitcoin fell below the $30,000 support level recently. Bitcoin price was rebound after stimulated by comments from the CEO of Tesla, Elon Musk, concerning the possibility of  Bitcoin payment for Tesla.

Bitcoin was trading at $32,636 at 11:15 a.m in Hong Kong, up by 1.89%. The highest point of BTC reached to $32,787 level in 24 hours, according to Datamish.

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Market share of top crypto exchanges passes $1T: CryptoCompare report

Out of the 160 cryptocurrency exchanges analyzed in a recent report, half control roughly 85% of the total market share.

According to a CryptoCompare Research report published today, exchanges that the analytics firm rated as “top tier” gained 13% of the market share from October to January. This put the market share of these 84 exchanges at roughly 74% with more than $1 trillion in assets.

However, CryptoCompare said this percentage likely rose to 85% for January. Given that the total market capitalization of all cryptocurrencies is $1.47 trillion at the time of publication, the market share of these exchanges may now be more than $1.2 trillion.

Source: CryptoCompare

The report attributed the increase in market share to retail and professional crypto traders turning to exchanges with seemingly lower risk as the price of Bitcoin (BTC) surged past $20,000 in late December and $30,000 in January. 

However, one of the more significant reasons for the increased market share may be CryptoCompare rating 16 more exchanges as “top tier” than in October — a designation meant to measure an exchange’s level of risk rather than their superiority. The firm noted that many exchanges are now complying with “toughened” KYC and AML requirements. Many are also providing increased transparency, and improving their overall operational status. 

According to CryptoCompare’s results, the firm said that 44% of the 160 exchanges analyzed offered the ability to “query full historical trade data via a public API endpoint,” compared to 37% in July. In addition, the percentage of exchanges rated as having “poor or inadequate” KYC systems according to CipherTrace had fallen from 44% in July to 33% in January.

The report specifically mentions Coinbase, Gemini, Bitstamp, Kraken, itBit and Luno as the “lowest risk exchanges. Others such as Binance, FTX, OKCoin, Huobi Global, and Bitfinex are listed in the next “lower tier” category.