Post by congregatio on Sept 7, 2021 1:49:08 GMT 4
FTX.US, the American affiliate of billionaire Sam Bankman-Fried’s global cryptocurrency exchange FTX International, is betting that it can leverage a similar playbook to its parent company and successfully compete in the ever-crowded U.S. market. Specifically, it is going to start offering crypto derivatives to clients.
Announced Aug 31, 2021, the one-year old exchange has agreed to acquire the parent company of LedgerX LLC, a Commodity and Futures Trading Association (CFTC)-regulated crypto derivatives exchange, for an undisclosed sum. Derivatives are financial instruments, such as futures, whose price is based on the value of an underlying asset. LedgerX currently offers futures, options, and swaps on bitcoin and ether.
If the deal closes, which could happen as early as October, FTX.US will be able to offer U.S. clients a distinct product line from industry heavyweights such as Coinbase, Kraken, or Gemini.
“We want to plant our flag in something that is uniquely ours,” says Brett Harrison, CEO of FTX.US. “Going into the derivatives market is such a natural extension...FTX International has two years of running an exchange with $500 billion monthly volume in derivatives without seeing serious liquidations or having nearly any downtime. It feels like this is clearly within our wheelhouse.”
It is fortunate that FTX.US has this playbook to draw on, as it is still looking to make a major impact in the ever-competitive and crowded American crypto spot market. The exchange is growing fast. Harrison said that in January 2021 it averaged $1 million worth of spot volume per day, yet over the last 24 hours that number has risen to over $350 million, according to CoinGecko. Still, this is a small fraction of the daily volume seen by Coinbase ($4.6 billion), Kraken ($1.2 billion), or Binance.US ($1 billion). Binance.US is the American franchise of Binance.com, the world’s largest cryptocurrency exchange. These numbers do not also take into account the rapid growth in crypto trading volume seen by PayPal, Square, and Robinhood in recent months.
The market for regulated derivatives in the U.S. is much less crowded. The major player is the Chicago Mercantile Exchange (CME), which currently has $1.63 billion of open interest (unsettled contracts) in bitcoin futures. It also offers ether futures and bitcoin options. However, if we remove the U.S. geofence, the market becomes much denser and competitive. FTX International is the third-largest derivatives exchange in the world with $2.3 billion, but it is still far behind Binance ($4.15 billion). LedgerX does not factor into the top 10. CME was briefly the largest in the world in terms of open interest this past winter, but it has since fallen to the fifth position.
Announced Aug 31, 2021, the one-year old exchange has agreed to acquire the parent company of LedgerX LLC, a Commodity and Futures Trading Association (CFTC)-regulated crypto derivatives exchange, for an undisclosed sum. Derivatives are financial instruments, such as futures, whose price is based on the value of an underlying asset. LedgerX currently offers futures, options, and swaps on bitcoin and ether.
If the deal closes, which could happen as early as October, FTX.US will be able to offer U.S. clients a distinct product line from industry heavyweights such as Coinbase, Kraken, or Gemini.
“We want to plant our flag in something that is uniquely ours,” says Brett Harrison, CEO of FTX.US. “Going into the derivatives market is such a natural extension...FTX International has two years of running an exchange with $500 billion monthly volume in derivatives without seeing serious liquidations or having nearly any downtime. It feels like this is clearly within our wheelhouse.”
It is fortunate that FTX.US has this playbook to draw on, as it is still looking to make a major impact in the ever-competitive and crowded American crypto spot market. The exchange is growing fast. Harrison said that in January 2021 it averaged $1 million worth of spot volume per day, yet over the last 24 hours that number has risen to over $350 million, according to CoinGecko. Still, this is a small fraction of the daily volume seen by Coinbase ($4.6 billion), Kraken ($1.2 billion), or Binance.US ($1 billion). Binance.US is the American franchise of Binance.com, the world’s largest cryptocurrency exchange. These numbers do not also take into account the rapid growth in crypto trading volume seen by PayPal, Square, and Robinhood in recent months.
The market for regulated derivatives in the U.S. is much less crowded. The major player is the Chicago Mercantile Exchange (CME), which currently has $1.63 billion of open interest (unsettled contracts) in bitcoin futures. It also offers ether futures and bitcoin options. However, if we remove the U.S. geofence, the market becomes much denser and competitive. FTX International is the third-largest derivatives exchange in the world with $2.3 billion, but it is still far behind Binance ($4.15 billion). LedgerX does not factor into the top 10. CME was briefly the largest in the world in terms of open interest this past winter, but it has since fallen to the fifth position.