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Best Crypto Derivative Exchanges in 2024

10 mins
Fact Checked
by Maria Maiorova
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If you like trading, you will love derivatives. And if you love derivatives, you will fall head over heels for crypto derivatives. But where do you go to trade them, and what are the best crypto derivative exchanges? Find the answer to these questions and more in this guide.

Best crypto derivatives exchanges

Fees:
0,02%-0,06%
Welcome bonus
up to 10 CALL
Assets
70+
Fees:
0,02%-0,04%
Welcome bonus
up to 100 USDT
Assets
500+
Fees:
0,02%-0,05%
Welcome bonus
up to 100 USDT
Assets
320+
Fees:
0,02%-0,05%
Welcome bonus
up to $2125
Assets
370+
Fees:
0,02%-0,05%
Welcome bonus
up to $300
Assets
340+
Fees:
1 pips
Welcome bonus
no
Assets
200+
Fees:
0,01%-0,075%
Welcome bonus
n/a
Assets
20+

What are crypto derivatives exchanges?

A derivative is essentially a contract that derives its value from the performance of one or more underlying assets. In this case the assets are Bitcoin and cryptocurrencies. A crypto derivatives exchange is an exchange that offers crypto derivatives. Derivatives offer investors a capital-efficient way of gaining exposure to cryptocurrencies without the technicalities of trading and the skills to read crypto charts.

Derivatives contracts can be broken down into three major categories though they have many different options.

  • Futures
  • Options
  • Swaps
perpetual futures guy in glasses crypto web3

Crypto futures

A futures contract is an agreement to sell something at a future date at a price that is decided in the present. In the case of Bitcoin and other crypto assets, futures are listed on an exchange that becomes the intermediary.

Exchange contracts come in a pre-decided format, have pre-decided sizes, and have pre-decided expirations. The two first exchanges to offer futures for the price of Bitcoin were the Chicago Board Options Exchange (CBOE), and the Chicago Mercantile Exchange (CME), in December 2017. The latter is now the market leader for institutional BTC futures.

All futures contracts have an expiry date that denotes when the buyer and seller settle their outstanding positions.

Crypto options

Options are very similar to futures. Instead of being obligated to sell at a certain time, this contract type provides the option not to. Only one party is bound by the contract, meaning that the seller or exchange has an obligation to deliver the crypto-asset should the buyer choose to exercise their right to buy.

Options are classified as either a put or a call. The call option grants the buyer the right, but not the obligation, to buy the asset at a later date at a given price, whereas a put gives the right to sell at a later date or specified price.

Perpetual swaps

Swaps are a little more complicated. People often call them “perpetual contracts, ” essentially futures contracts with no expiry or settlement. Perpetual swaps are designed to be the same as spot trading prices, but there are a number of advantages over spot trading.

This type of contract uses leverage cheaply and easily, shorting the asset is also made easier, and liquidity on perpetual swaps is usually much higher. Leveraged contracts with volatile cryptocurrencies are extremely high risk, however, since small changes in market prices can quickly result in liquidation.

Perpetual swap markets are valued by requiring traders to hold enough of the underlying asset to cover their orders. Assets such as Bitcoin are not physically bought with these contracts but must be held in order to cover them in the event of a liquidation.

CFDs

Other types of cryptocurrency derivatives exist, such as contracts for differences (CFDs). Hence, these are cash-settled derivative contracts in which the parties seek to secure a profit or avoid a loss by agreeing to exchange the difference in price between the value of the crypto asset CFD contract at its beginning and its end.

Taker and maker fees

bitcoin futures trading cover

To trade derivatives contracts, most exchanges will charge taker and maker fees. When a trade takes place, it is usually between two parties. The maker (referred to as “market maker”) provides liquidity by placing limit orders on the order books prior to the trade. Makers are rewarded for this by being charged lower fees.

The taker ‘takes’ that liquidity by matching maker orders and placing market orders to buy or sell orders sitting on the books immediately. There is a slightly higher fee for being the taker.

The maker-taker model encourages liquidity by rewarding the makers with a discounted fee, resulting in a tighter market spread due to the increased incentive for makers to outbid each other. Therefore, the higher fee that the taker pays is usually offset by the better prices this tighter spread provides.

In derivatives trading, the exchanges often charge maker and taker fees to encourage this liquidity and offset undesirable behavior.

Margin trading

Margin trading refers to the use of leveraged funds offered by the exchange. In other words, leverage is a loan provided to an investor by an exchange that controls the trader’s account. With this in mind, BitMEX and Binance offer crypto derivatives with up to 125 times leverage which means the position is magnified by this amount. It also means that losses are magnified as leveraged trading is very risky and the ‘house’ usually wins!

Crypto derivatives can be difficult to understand, the deeper you go, the more there is to process. Learn everything you need to know at the BeInCrypto Telegram group.

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Other bitcoin futures exchanges

There are a number of other exchanges that offer crypto derivatives, and some specialize in only those products.

Deribit

Deribit was launched in 2016 in Europe and was one of the first exchanges to offer Bitcoin futures and options. BTC USD-denominated futures contracts on Deribit are cash-settled rather than payouts, which are the physical delivery of Bitcoin.

Additionally, the exchange offers quarterly Bitcoin and Ethereum futures. There are also leveraged option contracts for the two assets and cash-settled BTC and ETH swaps.

Fees align with industry standards, and withdrawals are processed on the fly through a hot wallet. Regarding liquidity, Deribit is a small fish with BitMEX, for example, having around fifty times the volume.

Other derivatives exchanges

Other smaller derivatives exchanges include Bybit, PrimeXBT, bitForex, and bitZ. There are also other traditional crypto exchanges offering futures contracts. These include Kraken, Bithumb, and Bitfinex, though their volumes are much lower than the bigger players listed above.

Institutional behemoths include the Chicago Board Options Exchange (CBOE), the Chicago Mercantile Exchange (CME), and the Intercontinental Exchange’s Bakkt. They tend to be suited to large institutions rather than individual traders and investors.

What is the best crypto derivatives exchange?

The best crypto derivatives exchange is the best one for you. In this market, there is no such thing as a panacea. Maybe you like the liquidity of one exchange and the fees of another. It’s all up to your personal preference. Nevertheless, it is important to remember that no matter which exchange you choose, you always choose to trade responsibly and never risk more than you can comfortably afford to lose.

Frequently asked questions

What are crypto derivatives?

Are there any decentralized crypto derivative exchanges?

What are derivatives?

Are derivatives risky?

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Martin Young
Martin Young is a seasoned cryptocurrency journalist and editor with over 7 years of experience covering the latest news and trends in the digital asset space. He is passionate about making complex blockchain, fintech, and macroeconomics concepts understandable for mainstream audiences.   Martin has been featured in top finance, technology, and crypto publications including BeInCrypto, CoinTelegraph, NewsBTC, FX Empire, and Asia Times. His articles provide an in-depth analysis of...
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