TI Research Report - 2021 Q1 Crypto Futures & Options Market
May 10.2021TI Research
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At the moment of "perpetual dominating", the futures and options market seems to be the neglected corner in the bull market. In the 2021Q1, the total trading volume of the futures and options accounted for only 7.21% of the total market, and there were only a dozen exchanges involving futures and options business. However, the importance of the futures and options market cannot be ignored. At a time when speculators generally turn their attention to perpetual contracts, the futures market and options market has gathered a large number of professional investors, including various institutions. Combining the indicators from the futures market and the options market, we can observe the views and influence of pro investors' actions on the crypto market.

Executive Summary

  • In 2021 Q1, there are 17 exchanges conducting futures trading business, with a quarterly total trading volume of $2.07 trillion, accounting for 6.77% of the total market trading volume. Although compared with last year, the volume of futures has also risen sharply as the Q1 bull market gradually improved, its growth rate is lower than that of perpetual contracts.
  • Excluding exotic options products, Q1 options market trading volume reached $133.22 billion, equivalently 1.73 times last year's full-year trading volume, and is the best-growing derivative market this quarter.
  • The increase of Q1 crypto asset futures contract position was higher than that of Bitcoin for most time, but lower than that of Ethereum, indicating that the overall growth of the futures contract position group was relatively slow and the investment group was relatively stable.
  • Unlike the “all flowers blooming together" in the perpetual contract market, the futures and options market still continues the old market pattern of "one superpower and many powers". In the futures and options market segmentation, the top three exchanges accounted for 93% and 88% of the trading volume, respectively. Compared with last year, the changes were not obvious, and the market structure was relatively stable.
  • There is a significant negative correlation between the current volatility skew of mainstream crypto asset options and the near- future price of the underlying asset. The above character enables volatility skew to predict future price trends to a certain extent.
  • Non-mainstream crypto asset options have developed. Compared with last year, their liquidity can be guaranteed to a certain extent, and the overall operation situation is relatively stable.
  • As speculators turn to the perpetual contract market, the proportion of professional investment groups in the futures market has gradually increased in Q1.
  • Compared with last year, the options investor group has changed relatively little. But on the one hand, the influx of individual investors is changing the structure of the options market; on the other hand, it can be found from indicators such as the long-short ratio that individual investors in the options market are gradually becoming rational and mature.

Industry Prospect

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