Deribit cryptocurrency exchange has announced its plans to launch linear options on XRP, SOL, and MATIC come January. This move signifies the company’s unwavering commitment to expansion, even as the crypto market experiences a period of relative calm.
Luuk Strijers, Deribit’s Chief Commercial Officer, recently shared these plans with Bloomberg. Moreover, he took to social media to reveal the company’s intentions to apply for an EU brokerage license. While Strijers acknowledges the current market conditions might not be the most conducive for rolling out new products, he remains optimistic. He believes introducing these linear options will coincide with a surge in market volatility.
Trade activity for bitcoin futures has seen a decline this year. Bloomberg reported that from a staggering $2 trillion at the start of the year, it dwindled to approximately $1.5 trillion by September. This decrease is attributed to the falling values and reduced volatility of digital assets, especially when juxtaposed with the highs in 2021.
However, the digital asset market might be on the brink of a shakeup. Investors are keenly awaiting U.S. authorities’ potential approval of Ether futures ETFs and Bitcoin spot ETFs. Consequently, these developments could inject fresh volatility into the market.
Additionally, Deribit is set to diversify its offerings. Users can trade cryptocurrencies beyond the usual suspects of Bitcoin, Ether, and USD Coin for the first time. Suppose all goes as planned and Deribit secures the necessary license. In that case, the company is set on relocating its operations from Panama to Dubai, a locale known for its crypto-friendly regulations. Strijers informed Bloomberg that Deribit’s team, currently 115 strong, is set to expand with 12 new members.
Bloomberg’s analysis paints a picture of volatility metrics for major cryptocurrencies like Bitcoin and Ether at, or close to, record lows. Richard Galvin, Co-founder of Digital Asset Capital Management, has observed a consistent drop in volatility for these assets over the past year. Hence, introducing altcoin linear options could serve as a more efficient hedging strategy for diversified crypto portfolios, especially considering Ether’s diminishing volatility.
Deribit’s dominance in the options market is evident, controlling a whopping 85% share, leaving the remaining 15% to competitors like OKX, Binance, and Bybit. Institutional customers account for around 85% of the exchange’s trading volume.
The year began with Deribit offering spot trades at zero fees. Strijers emphasized that the platform’s primary aim isn’t to rival existing token sales platforms. Instead, their focus is on derivatives trading. He stated, “We don’t charge for this service because we don’t like the possible profits; rather, we want to make money via derivatives trading.”
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