Institutional Investors Are Increasingly Using Crypto Options Trading to Hedge Their Bets in Bear Market

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Institutional Investors Are Increasingly Using Crypto Options Trading to Hedge Their Bets in Bear Market
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Options trading has been increasing on a number of crypto exchanges and even miners are using options strategies to limit their downside risk in the current bear market. mikeybellusci reports

. Panama-based derivatives platform Deribit, which is among the world’s largest exchanges for crypto options trading volume, told CoinDesk demand is surging ahead of the Merge.Earlier this week, in a disappointing second-quarter earnings report, crypto exchange giant Coinbase evento traders migrating to derivatives-focused platforms as a reason for declining trading volume. Coinbase’s dipping volume led to a 30% decline in the company’s revenues – below most analysts’ estimates.

By comparison, traditional options trading of stocks accounts for 20% of the market cap of the S&P 500 at the Chicago Board Options Exchange , EDG said. “When you think of all the other [S&P 500]-like products including [exchange-traded funds], SP Minis, etc., you can see that bitcoin options have multifold growth ahead of it,” EDG’s quant developer, Marcin Maksymiuk, told CoinDesk.

Delta generates over $200 million in options trading volume per day, and Balani said that “options provide a way for people to get engaged with the market even in a sideways environment.” He foresees options eventually accounting for 60% of the crypto trading market.

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