2020 has become one of the most successful years for the cryptocurrency market. After a two-year lull, interest in cryptocurrencies resumed, leading to an unprecedented rise in their market valuation.
The reason for such a busy year for cryptocurrencies was the downturn caused by the pandemic, which led to significant volatility in the market for both traditional and digital assets, and opened up many new opportunities for traders around the world.
Cryptocurrencies such as Bitcoin and Ethereum have proven to be quite resilient in the face of the economic crisis thanks to growing support from both retail and institutional investors.
The new surge in the cryptocurrency market has quickly turned them into one of the best performing assets of 2020 – an asset more popular than traditional investment solutions like gold and the stock markets. Many analysts believe that cryptocurrencies will continue to grow in 2021 amid new stimulus programs from major central banks and governments and, as a result, rising inflation.
Opening remarks by Aaron Gong (AG), VP of Binance Futures
Steve Jobs once said, “You can’t tie everything together by looking ahead; you can only do this by looking back. And all that remains is to believe that in the future everything will be connected by itself into a single whole. “
The new decade has brought with it a number of uncertainties and uncertainties. The Covid-19 pandemic has rocked the entire world, including our industry. We were very worried about the consequences of Black Thursday on March 12th. But they did not give up, but worked hard on their development.
Today we are seeing positive results of our work. The success of Binance Futures is largely due to the consistent implementation of innovative products, improved user experience, and the transparent operation of the platform, which our users can always count on for stability.
Thanks to our efforts, Binance Futures has expanded significantly this year. We are proud to share with you the most important successes we have achieved with the support of the community and which have put us in the first place:
In the first quarter, 24 new USDT-margined contracts were launched , while at the beginning of 2020 there were only three contracts available.
Cross-collateral launched – an innovative feature that allows one cryptoasset to be used as collateral for borrowing other cryptoassets. Read more about cross-collateralization here .
We launched Binance Options to make options trading easier for individual users. With built-in leverage, users can maximize profits with minimal risk. Learn more about Binance Options https://www.binance.com/en/blog/421499824684900519/Heres-What-You-Need-To-Know-About-Binance-Options here .
Leveraged Binance Tokens (BLVT) launched. This innovative product allows you to build up your position on a specific crypto asset without the risk of liquidation. Read more about BLVT here .
Coin-margined quarterly futures launched , our second flagship product to replace USDT with native tokens for trading and collateralizing futures contracts. You can read more about the difference between the two flagship products on our blog .
Coin-margined perpetual futures launched, allowing you to trade futures contracts with no expiration date. Read more about the benefits of contracts here .
The DeFi Composite Index launched , the first composite index on Binance to enable users to track and participate in the fast-growing DeFi market. You can start trading DeFi Index futures here .
Launched Leaderboard – social media and cryptocurrency trading integration allowing you to view and subscribe to the positions of the best traders on the platform. The leaderboard can be viewed here .
Battles started. This is a new way of trading cryptocurrency, where traders compete face to face for a certain time, after which the winner with the highest profit is revealed. You can take part in the battle right now !
On December 20, open interest on the exchange exceeded $ 2.7 billion .
On December 18, a new all-time high was marked, exceeding $ 36 billion.
In total, Binance Futures offers over 162 derivatives products :
80 futures contracts USDT-Margin;
40 Coin-margined futures contracts;
36 Leveraged Binance Tokens;
4 Binance options.
At the time of this writing, Bitcoin is holding firmly above the $ 20,000 mark, approaching $ 25,000. Trading on Binance Futures has reached a new all-time high with over $ 36 billion in daily trading volume, cementing our status as the largest crypto derivatives exchange in the world.
It is not yet known what will happen to Bitcoin in 2021 – just like all of us on Binance Futures. But despite the likelihood of another difficult period coming, I am sure that we will survive any crisis if we continue to work on development. We will continue to focus on our core values - user-centered design and innovative products – while continuing to engage with our users, the community and the entire industry.
For new connections in 2021!
AG, Vice President of Binance Futures
Overview of the crypto futures market
As with traditional finance, the derivatives market is an integral part of the cryptocurrency ecosystem, providing the necessary liquidity and hedging opportunities in a fast-growing market.
The introduction of cryptocurrency futures and options in the market is accelerating: since the beginning of the year, the trading volume has exceeded $ 8 trillion, half of this volume fell in the first half of 2020. If the current bullish trend continues into 2021, the trend is likely to intensify.
Crypto assets rebounded quickly from the Black Thursday market crash in the first quarter, after central banks around the world poured trillions of dollars into financial liquidity systems to fight the pandemic-triggered recession. Volumes on major cryptocurrency exchanges surged in parallel with the market recovery as investors turned to inflation-hedging assets like gold and Bitcoin.
The third Bitcoin halving in May was expected to catalyze price increases. However, this event had little impact on Bitcoin, which remained flat, ending the first half of 2020 with lower derivatives volume.
In July, altcoins dominated thanks to DeFi research and development. Many exchanges, including Binance Futures, promptly offered hedging instruments in the form of DeFi token futures contracts, which significantly boosted trading volumes in August. As the hype around DeFi subsided, Bitcoin regained its position in the market, breaking the first significant barrier of $ 10,000 and starting a rally that continues to this day.
Trading activity hit record highs in November across all major exchanges; volumes have doubled compared to the previous month. During the month, cryptocurrencies have steadily grown due to increased demand from institutional investors.
On December 19, Bitcoin crossed a new milestone: its price on the Binance spot market exceeded USD 24,000 for the first time in history. This breakout has reaffirmed Bitcoin’s bullish sentiment, and crypto sales are likely to continue into 2021.
Binance Futures Growth in 2020
In just one year since its inception, Binance Futures has become the largest derivatives exchange in terms of volume and number of open positions.
The platform has gained widespread acceptance among users for the reliability and stability of our infrastructure, proven in extreme market conditions such as Black Thursday. Thus, our market share continues to grow month by month.
With the introduction in the second half of 2020 of our second flagship product – Coin-margined futures contracts – users have access to a comprehensive derivatives trading ecosystem with the ability to trade USDT and other cryptocurrencies futures. In addition, we have expanded our existing product lines with new altcoin contracts. The vast selection of altcoin futures contracts on Binance has provided users with more trading options during the rise of altcoins.
By August, Dexbnb.com Futures’ monthly volumes surpassed those on OKex thanks to a wide selection of altcoin futures. In the following month, we ranked # 1 with sales of over $ 176 billion, maintaining the lead through October. From the third quarter to the present day, Dexbnb.com Futures’ market share has been stable in the range of 32% to 35%.
November has become a record month for us. Thanks to Bitcoin’s rally to its previous highs, Dexbnb.com Futures has a volume of over $ 450 billion, almost 200% more than in October. Large cap altcoins also performed well, causing a massive surge in trading activity across all instruments. In November, we recorded a new high of over $ 30 billion in daily trading volume and a record open interest of over $ 2.6 billion, the highest in crypto futures to date.
What’s next for cryptocurrencies in 2021?
While it is difficult to predict with certainty whether the current bullish trend will continue until 2021, we are confident that this year’s positive changes in the entire cryptocurrency economy will not fade away. Large institutional investors are starting to notice the value of digital assets. They will continue to invest in this industry, taking it to new heights.
The rise in popularity of cryptocurrencies this year marks the beginning of a crypto revolution. After the pandemic, the new digital economy will be involved in many industries, potentially leading to wider adoption of cryptocurrencies.