Binance Futures 2020 Recap: Where Bitcoin took us and what awaits in 2021?

Cryptocurrencies are on the verge of recording one of their biggest years ever as 2020 draws to a close. After a two-year stall, cryptocurrencies saw renewed interest as market valuations surged to their highest point in recent years. 

This year has been eventful for cryptocurrencies as a pandemic-induced recession brought considerable volatility for both traditional assets and crypto-assets, providing ample opportunities for traders worldwide.

Despite a challenging economic landscape, cryptocurrencies like Bitcoin and Ethereum have proven resilient with growing support from both retail and institutional investors.

The resurgence of cryptocurrencies has quickly positioned them as one of the best-performing assets in 2020, outperforming traditional investments such as Gold and the stock markets. Many analysts believe that the rally will continue in 2021 as inflation-boosting stimulus programs authorized by major central banks and governments are likely to continue. 

Foreword by AG

Steve Jobs once said, “You can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future.”

The new decade brought in a whole new world of uncertainty and unknown to us. The Covid-19 pandemic shook the world, and our industry was not spared. The impact of Black Thursday on March 12th remains one of the darkest days for our industry. Instead of giving up, we persevered and kept on building. 

Today, we are enjoying the fruits of our labor. Binance Futures’ success is attributed to our continuous efforts to introduce innovative products, enhance users’ experience, and at the same time, ensure a seamless and stable performance that users can rely on. 

Owing to these efforts, Binance Futures has grown tremendously this year. We are proud to share some critical milestones in this review, ones that we have achieved together with the community, that helped us reached the number one spot:

• Introduced 24 new USDT-margined contracts in Q1, expanding it from only three contracts at the start of 2020. 

• Introduced Cross Collateral, an innovative feature that allows users to collateralize their crypto assets to borrow against another crypto asset. Read more about Cross Collateral here.

• Introduced Binance Options, which simplifies options trading for retail users. With the built-in leverage offered, users can increase profits while minimizing downside risk. Learn more about Binance Options here.

• Launched Binance Leveraged Tokens (BLVT), an innovative product that allows users to gain increased exposure to a specific crypto asset without worrying about liquidation risk. Read more about BLVTs here.

• Launched Coin-margined Quarterly Futures, our second flagship product, allows users to trade and fund their futures contracts in native cryptocurrencies instead of USDT. More can be found about the difference between the two flagship products in our blog post.

• Introduced Coin-margined Perpetual Futures — users can trade futures contracts without an expiration date. Read more about its benefits here.

• Launched the DeFi composite index, Binance’s first composite index product, allowing users to track and participate in the fast-growing DeFi market. Get started with DeFi index futures here.

• Launched Leaderboard, a fusion of social networking and cryptocurrency trading that allows users to view and follow the positions of the best traders on the platform. Check out our leaderboard here.

• Launched Battle,  novel cryptocurrency trading by placing traders head to head in a battle to see who is the most successful over a certain period. Get started with Battle now!

• Open interest topped at $2.7 billion on December 20th.

• Marked a new all-time high in 24-hour volume of over $36 billion on December 18th.

• Altogether, Binance Futures offers over 160 derivative products:
  

  • 80 USDT-margined futures contracts

  • 40 Coin-margined futures contracts

  • 36 Binance Leveraged Tokens

  • 4 Binance Options

As of this writing, Bitcoin has firmly maintained a foothold above $20,000 and is approaching $25,000. Trading on Binance Futures surged to a new record high of over $36 billion in 24-hour volume, cementing our position as the largest crypto derivatives exchange in the world.

Bitcoin will strive towards uncharted territory in 2021, as do all of us at Binance Futures. Hard times may come again, but as long as we trust the process and keep building, I feel confident that our industry will survive any crisis. We will stay focused on our core values of user-centric design and innovative products while continuously engaging with our users, community, and industry. 

Here’s to making more connections in 2021,

AG

Overview of Crypto-Futures Landscape and Growth 

As with traditional finance, the derivatives market is integral to the entire cryptocurrency ecosystem, providing necessary hedging and liquidity solutions to a fast-growing market. 

Crypto futures and options products accelerated their adoption as volume surpassed $8 trillion year-to-date, with over $4 trillion in volume generated in the first half of 2020. This trend is likely to grow should the existing bull run persist through 2021.

Crypto-assets recovered swiftly from the “Black Thursday” market crash in Q1, as central banks worldwide injected trillions of dollars in financial liquidity to bolster a pandemic-induced recession. Volumes across major crypto exchanges surged in line with the market recovery as investors acknowledged the place of inflation-hedge assets such as Gold and Bitcoin. 

Bitcoin’s third halving event in May was expected to be a catalyst for a bull-run. However, it turned out to be a non-event as Bitcoin stagnated, ending the first half of 2020 with lower derivatives volume across the board.

In July, altcoins dominated the headlines riding on DeFi research and developments. Many exchanges, including Binance Futures, quickly offered hedging solutions via futures contracts for DeFi tokens, contributing significantly to August’s higher trading volume. As the DeFi hype tapered, Bitcoin reemerged and crossed its first major barrier of $10,000, paving the way to the rally we see today. 

November’s trading activity hit a record high across all major exchanges as volume doubled from the previous month. Cryptocurrencies rose relentlessly through the month, driven by increased demand from institutional investors. 

On December 19th, Bitcoin marked a new milestone as prices topped $24,000 on Binance’s spot market for the first time ever. The breakout reaffirmed Bitcoin’s bull run as the crypto frenzy looks set to continue into 2021.

Binance Futures’ Growth in 2020

Within a year since its inception, Binance Futures is now the largest derivatives exchange by volume and open interest.

Users increasingly recognized our infrastructure’s reliability and stability, especially in extreme market conditions such as Black Thursday. As such, our market share has continued to grow month after month. 

Following the introduction of our second flagship product in the 2nd-half of 2020, Coin-margined futures contracts, users can access a holistic derivative trading ecosystem where they can choose to trade futures contracts with USDT or cryptocurrencies. In addition, we continued to expand our existing product lines with new altcoin contracts. Binance’s extensive selection of altcoin futures contracts has provided users with more trading opportunities in the altcoin season.

By August, Binance Futures’ monthly volumes had surpassed OKex as our dominance in altcoin futures prevailed. In the following month, we successfully claimed the number spot with over $176 billion in volume and maintained our lead in October. Today, Binance Futures’ market share has consistently maintained within the range of 32%-35% since Q3.

November was a record-breaking month for us. Binance Futures generated more than $450 billion in volume, almost a 200% increase from the previous month as Bitcoin rose to pre-all-time high levels. Large-cap altcoins also performed equally well as bringing in a massive surge of trading activity across the board. In November, we registered a new all-time high in 24-hour volume of over $30 billion and a record open interest of over $2.6 billion, by far the largest numbers the industry has ever seen. 

What would 2021 bring to the future of cryptocurrencies?

While we can’t accurately forecast whether the current bull-run will persist through 2021, we can confidently say that positive developments achieved this year by the entire cryptocurrency economy will not wane away anytime soon. Large institutional investors are beginning to see value in the digital asset space. They will continue to invest in transforming our industry to new heights.

With cryptocurrencies’ increasing mainstream this year, the crypto revolution is just getting started. A post-pandemic world will see a new digital economy across many industries, which could potentially garner support to push cryptocurrencies to a new level of adoption.