Options exchange Deribit, which controls over 85 percent of the market, is looking to expand the roster for options trading on its platform. The exchange will offer options on XRP, SOL and MATIC starting in January 2024.
Options are an asset class that gives the buyer the right to buy or sell an underlying asset at a specified price on or before a specified date. Options are among the most popular portfolios for traders since they allow them to speculate about an asset’s price in the future without any requirement to buy it.
Deribit announced its decision on October 9. This move comes amid the instability in the global crypto market and the uncertain regulatory landscape. Adding to it is the plunging trading volume in the derivatives market, from $2 trillion in January to around $1.5 trillion in September.
However, in a recent interview, Deribit chief commercial officer Luuk Strigers said this would not affect their expansion plan.
“Is this the best environment to launch new products, or should we defer? That’s what keeps us awake,” he said.
Stringers also expects high volatility in January 2024, the time when the exchange will launch options on the three tokens. Deribit takes this as an opportunity to further strengthen its reign as the top options exchange in the market. The new offerings are expected to boost liquidity in the market and help traders manage risks more effectively.
Co-founder of Digital Asset Capital Management Richard Galvin joins traders in expressing the benefits of altcoin liquidity.
“Volatility has been falling relentlessly for the last year or so,” said Galvin, as quoted by Bloomberg. “ … Ether is no longer really an effective hedge for a broader portfolio of cryptoassets given its relatively low volatility.”
Despite having experienced high-profile incidents, Deribit is optimistic about its future development. It once suffered a $28 million hack on one of its hot wallets, which it compensated through its emergency reserve funds.
A year after the incident, Deribit seeks to expand its services in other lucrative regions. Along with the announcement of adding XRP, SOL and MATIC offerings, Deribit is also going public with expansion plans for the EU and Middle East.
The company is seeking a brokerage license in the EU, which is primarily motivated by the passage of the Markets in Crypto Assets (MiCA) regulations. The MiCA rule offers clarity for cryptocurrency operations in the region, with many countries pushing to become MiCA compliant before 2024. Although the announcement did not provide a particular time, according to analysts, Deribit will soon obtain the license.
Additionally, given Dubai’s recent crypto-friendly regulations, the Panama-based firm is working on a Middle Eastern office in the country. Deribit is also looking to increase its workforce by another dozen employees as part of the transition.
Deribit is also launching a zero-fee spot trading exchange to help boost its derivatives trading. Adding that the spot trading service will act as a gateway to the derivatives market, Deribit aims to become a comprehensive one-stop shop for everything crypto.
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