According to a report from Genesis, a large portion of future cryptocurrency trading volume growth will come from derivatives.
Genesis Q2 2023 Market Report stated that if the trend of traditional financial derivatives is followed, “the crypto options market has room to grow 10 times from current levels.”
Options have allegedly become the vehicle of choice for institutional investors entering the cryptocurrency market.
Gordon Grant, managing director of sales and trading at Genesis, said: “We have seen an increase in institutional investor inflows into crypto derivatives. CME crypto options performed well in July, the highest level in three months, ETH trading Volumes have risen sharply. Deribit’s monthly trading volumes continue to be relatively high.”
For some top institutional investors, the CME is considered a more stable venue than traditional cryptocurrency exchanges, he added.
“They are less interested in interacting with mainstream crypto exchanges than in the stability of CME. Institutional investors, especially the world’s largest asset allocators, view CME as having a safe and reliable brand,” Grant added.
