🔰 What are Derivatives?
👉Crypto Derivatives:
🔸Crypto derivatives are financial contracts valued based on underlying cryptocurrency assets. They enable traders to capitalize on crypto price fluctuations without holding the actual assets.
👉Why is Beldex providing a derivatives trading option?
Derivatives offer several advantages for crypto traders.
👉Hedging Against Volatility:
🔸They provide a way to hedge against the spot market's Price fluctuations. Using futures and options, traders can secure prices or reduce the risk of losses.
👉 Leverage Opportunities:
🔸Derivatives often come with leverage, enabling traders to invest a small portion of the total contract value while gaining significant exposure to the asset's price changes.
👉No Expiry Constraints:
🔸Perpetual contracts, unlike traditional futures, don't have an expiry date, eliminating the need for traders to roll over contracts at expiration.
👉Simplified Custody:
🔸With perpetual, you don't need to hold the actual crypto asset.
The BDX/USDT perpetual contracts on Deepcoin go live on the 18th of January, 2023.
🔰Beldex Spot & Derivative Trading on Deepcoin:
🔸The crypto market, primarily focused on cryptocurrency-based spot trading, is ever evolving. Many coins and tokens have already explored the derivatives trading options. Deepcoin exchange, in particular, has introduced the BDX/USDT derivative trading pair, featuring Beldex network's native token (BDX) and the widely-used stablecoin Tether (USDT). This addition offers users a unique opportunity to engage in derivative trading on the BDX/USDT pair on the Deepcoin platform.
🔸In traditional markets, derivatives often combine options, futures, or swaps to replicate another asset's characteristics. Blockchain based derivatives are no different however, they have their own perks. The Beldex network, underlying the BDX/USDT trading pair on Deepcoin, offers distinct advantages.
🔸The Beldex network provides immutable data storage and key transaction metrics on spot exchanges using data providers like CoinMarketCap and CoinGecko, enhancing market visibility and efficiency.
🔸Another major advantage is that the BDX/USDT derivative being listed is a perpetual futures contract. Perpetual futures, alternatively referred to as perpetual swaps or simply "perpetuals," represent a form of derivative contract enabling traders to make speculative predictions on the future price of an asset, and notably, without any predetermined expiration date.
🔸This is in stark contrast to conventional futures contracts that come with a fixed expiry date as perpetual futures possess the unique characteristic of being open-ended and can be held without any time constraints.
🔸Moreover, from a technical point of view, the Beldex network’s low maintenance needs and automated functions promise cost-effective, decentralized solutions that outpace traditional systems. Deepcoin’s listing of the BDX/USDT derivative trading pair also aligns with the broader trend of blockchain transforming the derivatives Market.
🔰What is the Impact of Beldex Derivatives Trading?
🔸Derivatives play a key role in shaping a maturing financial system, offering tools for risk management, enhancing liquidity, and facilitating price discovery – all vital for market growth and stability.
🔸In any financial market, including crypto, liquidity is essential and without it, price volatility escalates.
🔸Insufficient liquidity leads to wider bid-ask spreads, heightened volatility, and increased transaction costs, complicating traders' ability to enter or exit positions at favorable prices. This can also repel institutional investors who often require significant liquidity for large investments.
🔸Conversely, high liquidity draws more participants, fostering a more efficient, transparent market and reducing the risk of market manipulation.
🔸Derivatives are instrumental in hedging risks and enhancing portfolio management, contributing to overall market efficiency. By limiting potential losses, they enable traders to make more informed and calculated decisions. Additionally, derivatives trading enriches price discovery by supplying extra market data, which is crucial in understanding price trends and market sentiment of an asset.
🔸Disclaimer: The information provided in this article is not a solicitation for investment, nor is it intended as investment advice, financial advice, or trading advice. It is strongly recommended you practice due diligence, including consultation with a professional financial advisor, before investing in or trading cryptocurrency and securities.
