TI Research Report - 2021 Q1 Crypto Perpetual Trading

Overview

Perpetual contracts was called "gifts from God" in the cryptocurrency derivatives market. In the first quarter of 2021, under the catalysis of the bull market, the number of exchanges which carrying out perpetual contract-related businesses has increased to 51. In the first quarter alone, the volume of perpetual contracts has reached 14.32 trillion U.S. dollars, surpassing the last whole year derivatives trading volume, even slightly exceeded the spot market volume this quarter.

Regarding the definition of perpetual contracts, there have always been two different voices in the market. One thinks that perpetual contracts are a variant of futures, which is  "futures with no expiration date" and should be classified as futures; the other believes that perpetual contracts are derived from Contract of Difference (CFD), a high-risk and strictly regulated swap derivatives, previously limited to just institutions needs.

At present, most exchanges and users in the market classify perpetual contracts as futures. However, if you look into the perpetual contract products, you can find that the perpetual contract is a derivative with regular and regular exchange of cash flows. Both the long and short sides can complete continuously profit and loss swap without holding the spot. Hence, there is a big gap in its core mechanism with traditional derivatives products such as futures. Therefore, from the perspective of mechanism, it is more appropriate to classify perpetual contracts as "standardized swap derivatives".

Therefore, in this report, TokenInsight discusses perpetual contracts and futures separately and an independent "2021Q1 Cryptocurrency Perpetual Contract Trading Report". The report contains market macro-dynamics, exchange performance, perpetual contract product performance, and user characteristics, striving to comprehensively present the perpetual contract market from multiple angles and aspects. Provide corresponding information from a data perspective for traders and exchange operators who intend to participate in the perpetual contract market.

In addition to providing general macro and micro-aspects transaction data, TokenInsight has also integrated the market's perpetual contract transaction data and obtained some interesting findings in terms of factors affecting perpetual contract transactions and user characteristics through our innovation measurement and quantitative methods. 

Now you can log on to the official website tokeninsight.com to view real-time transaction data on different exchanges, different types of contracts, and different underlying cryptocurrency contracts in the perpetual contract market anytime and anywhere. For more information on the cryptocurrency perpetual contract market in the first quarter of 2021, Please Enjoy the Report.

ExecutiveSummary

• In 2021 Q1, TokenInsight tracked perpetual contract-related transaction data from 51 exchanges. The reported transaction volume of perpetual contracts among them was $14.32 trillion, surpassing the transaction volume of derivatives last whole year.

• Affected by multiple factors such as speculative sentiment and organized short-selling leading to large-scale liquidation, the perpetual contract market set a record volume of US$395.1 billion on February 23, and the top 10 daily volumes in this quarter were mostly concentrated around February 23.

• Two historical volatility peaks were formed in Q1 due to the large-scale selling of mainstream cryptocurrency such as Bitcoin and Ethereum in January and the organized short-selling actions of institutions in February.

• Investors have shown good adaptability to the highly volatile market environment.

• The USDT margined contract continued its strong performance and became the most popular contract product in the market this quarter. Its trading volume reached 8.51 trillion US dollars in the first quarter, accounting for 59.4% of the total market volume.

• Due to the high risk and speculative nature of perpetual contracts, countries should have strict supervision of such products, which resulting in a relatively small scale of compliance transactions. Among the 51 exchanges counted in the first quarter of 2021, Kraken is the only one that can operate perpetual contract-related transactions in compliance.

• Perpetual contract open interest on Huobi Exchange increased by 288.3%, and increased by 313.8% in FTX exchange, far exceeding the price increase of Ethereum (162.3%). Trading activity and user grow significantly.

• At present, cryptocurrency exchanges involving in perpetual contract-related business can be classified into five categories, which are large comprehensive exchanges, large perpetual contract exchanges, medium perpetual contract exchanges, compliant exchanges, and boutique exchanges. Boutique Exchanges focuses on niche markets and uses comparative advantages to build competitiveness. Their successful strategies include the development of new business lines, targeted operation of specific trading pairs, and optimization of trading systems for specific customer groups.

Industry landscape

For the English version of the Report, please click the click below.