TOP5 crypto derivatives exchanges

June 8, 2020   Bitcoin

Since the introduction of bitcoin futures from the Chicago Mercantile Exchange (CME), the crypto community has divided into two camps: the former believe that derivatives have provided new opportunities for the cryptocurrency market and will facilitate its legitimization by attracting institutional investors, and the latter claim that that derivatives affect cryptocurrencies negatively, dropping their prices without increasing the cryptocurrencies’ trading volume. It is likely that both opinions have the right to life, but two real facts cannot be taken away from derivatives:

  • Trading volumes on cryptocurrency exchanges have grown many times, making the market less volatile.
  • The number of tools that help manage crypto assets more professionally and flexibly, as well as make money even in a falling market, has increased significantly.

Since 2019, the rating of cryptocurrency exchanges offering derivatives trading has changed. Leaders of previous years did not hold their positions, new, promising platforms replaced them. In this article, we will analyze the TOP 5 exchanges by cryptocurrency derivatives trading volumes in 2020.

Huobi DM - $438 billion


Huobi is a trading platform created in 2013 in China. Initially, it functioned only in China, but after the reorganization in 2014 it became available almost all over the world. Since 2017, the platform’s head office has been located in Singapore due to the introduction of a series of prohibitions for blockchain companies in China. The exchange offers spot market trading, margin trading and futures trading. Derivatives trading volume for the first quarter of 2020 is $438 billion

Reputation

After massive hacking cryptocurrency exchanges in 2018, Huobi suffered less than the rest. The number of hacked accounts does not exceed 15, although at that time the exchange held top positions with a turnover of about $1 billion. Negative reviews about the exchange mainly related to the terminal’s slow operation and a long support response, but these reviews were dated from 2017 to 2018, and over time, the exchange fixed those issues. Huobi is considered a safe exchange with a reliable reputation. There have been no hacker attacks recently on the exchange.

The only negative point in the media related to the exchange is the charge of trading volumes falsification by analyst Sylvain Ribes. According to his calculations, trading volumes are overstated by 80%, but he has not yet succeeded in proving his case.

Safety

To ensure the security of clients’ funds, the platform uses a number of traditional, but reliable tools:

  • Binding a mobile phone to an account. Each time you enter the exchange, you will need a password code that will come to your phone.
  • Sync your account with email.
  • Using Google Authenticator
  • 98% of customer funds are stored in cold multi-sign wallets.

Verification

Huobi Exchange verification is optional. Verification of identity data takes 1-3 days. Non-verified users can withdraw up to 0.1 BTC per day, verified users - up to 200 BTC per day.

Limits

Depositing funds to the exchange is possible with cryptocurrency, there is no restriction on the maximum amount of depositing and there are no commissions. The minimum deposit threshold for each cryptocurrency is different: for BTC it is 0.00005, for ETH it’s 0.01.

Withdrawals on the platform are available only in cryptocurrencies. The size of the commission for BTC is 0.0005, for ETH - 0.004. The withdrawal limit depends on the status of the client’s verification.

OKEx - $417 billion


OKEx is a cryptocurrency exchange registered in 2014 in Hong Kong. In 2018, it came under the jurisdiction of Malta. The creator of OKEx is Star Xu. The exchange offers the following financial assets for trading:

  • Spot market
  • Margin trading with a leverage of 20:1
  • Trading futures and settlement futures
  • Options trading
  • OTC trading

OKEx is the only exchange in TOP 5 that provides trading bitcoin options. Derivatives trading volume for the first quarter of 2020 is $417 billion.

Reputation

Judging by user reviews, the exchange has a number of problems:

  • The site often hangs and lags
  • The depositing and withdrawal process takes a long of time
  • You can contact support only in English
  • Customer support is not stable
  • When you enter your account, the system does not always recognize the password. You would not have paid attention to this, but after the fourth incorrect password entry, you will have to wait 24 hours.
  • Problems with depositing and withdrawing funds

Safety

Exchange developers approach at a high level to the issue of security. You will have to fulfill a number of prerequisites to work on the exchange:

  • Use two-factor authentication and install Google Authenticator
  • Create a strong password
  • Attach a phone number
  • Create antiphishing code

In 2017, the exchange was subjected to a hacker attack, attackers managed to gain access to the user accounts of the platform. But thanks to the actions of the development team, it was possible to avoid the loss of customer funds. This case has recommended the exchange as one of the most secure and reliable in the market.

Verification

Verification is required. After passing the first level of verification the user can withdraw up to 100 BTC per day or equivalent. After passing the second level - up to 300 BTC per day or equivalent. Verification of data to confirm identity takes 1-3 days.

Limits

Depositing funds to the exchange is possible using cryptocurrency, there is no restriction on maximum depositing amount. The minimum deposit threshold is different for each cryptocurrency, for BTC it’s 0.00005, for ETH it’s 0.01.

To withdraw funds, the exchange obliges users to set two-factor authentication and fund password. Limitations on withdrawal depend on the level, based on the said above. However, for “Ordinary” clients of the first level, withdrawal of 300 BTC per day is available, which is enough for 90% of traders. The withdrawal is available in cryptocurrency, for each cryptocurrency there is a specific commission: for BTC it’s 0.0005, for ETH it’s 0.004.

Transactions in fiat currency on the exchange are not available.

BITMEX - $310 Billion


BitMEX is a platform for cryptocurrency margin trading created in 2014. The exchange was launched by three experts in finance - Samuel Reed, Arthur Hayes and Ben Delo. The company managing BitMEX is HDR Global Trading, registered in the Seychelles, that is, an offshore exchange. BitMEX provides customers with the ability to trade perpetual contracts and settlement futures. Derivatives trading volume for the first quarter of 2020 is $310 billion.

Reputation

During its operation, BitMEX has earned a reputation as a safe and honest exchange with detailed documentation. The disadvantages of the platform:

  • Failures in the operation of the exchange during high market volatility
  • Financial transactions only in bitcoins
  • There is no verification procedure and supervision by the state regulator, which implies risks

In addition, the exchange is known for the practice of liquidating positions. It happened due to the leverage of the 100:1 and the inexperience of traders, so BitMEX regularly receives negative comments from the latter. In 2019, the exchange liquidated positions for $20 billion.

Over the past six months, two class action lawsuits have been filed with BitMEX.

The first lawsuit is from early BitMEX investors. The exchange is accused of not providing a share in the authorized capital of the company, although this was agreed upon before investing in the company. According to investors, they took the risk by participating in the early rounds of financing the exchange, but BitMEX did not admit guilt and is ready to defend its rights in court.

The second lawsuit is that BMA LLC accuses the exchange of fraud, money laundering, illegal activities and manipulating the cryptocurrency market. According to the plaintiff, in 2019, 15% of the trading volume of the exchange fell on residents of the United States. However, the exchange does not have a license to work in the country and despite this, the exchange provided services to residents of the United States.

Safety


BitMEX developers give priority to users’ security issues, there has not been a single case of loss of customer funds. BitMEX wallet addresses are multi-sig, customer funds are kept offline. Even if an attacker manages to circumvent the exchange protection system, the withdrawal of funds will fail. When withdrawing funds from the exchange, the application is checked by at least two BitMEX employees. Also, thanks to the use of Amazon Web Services, BitMEX introduced several types of authentication, only after passing through which it becomes possible to use exchange tools.

Verification

There is no verification on the exchange, you need to confirm the email address and start trading. As a security measure, it is proposed to establish two-factor authentication, apply PGP encryption of email and restrict access to an IP-based account.

Limits

BitMEX has no limits on deposit and withdrawal of funds. But submitting an application for withdrawal of funds is required before 13:00 UTC, because applications are processed manually. Due to the lack of verification procedures, the only currency that is available to replenish a deposit on the exchange is Bitcoin. The commission is not charged, only the blockchain commission is charged.

Binance Futures - $222 Billion


Binance is a cryptocurrency exchange created by Changpeng Zhao in 2017, it’s registered in Malta. Binance is known for attracting $15 million at the ICO, and over the next two years it has become a leader among the largest cryptocurrency exchanges in the world. The founder of the exchange became a billionaire within a year, which made him the richest person in the crypto industry. Binance provides customers with financial instruments:

  • Spot market
  • Margin trading
  • Trade in perpetual futures
  • OTC trading
  • Trading with leverage tokens

Derivatives trading volume for the first quarter of 2020 is $222 billion

Reputation

Binance takes first place in popularity among cryptocurrency exchanges in a range of countries. The exchange captivates with its variability and development, although in 2020 it will celebrate 3 years from its foundation. During this time, various options for trading, assets and services appeared on the exchange. But there was a negative point: in 2019, user funds of $40 million were stolen from Binance. Attackers used phishing attacks to obtain information about the accounts of the exchange's customers. Binance took the blame for this incident and recovered funds from the contingency fund.

Users highlight three positive aspects of the exchange:

  • The choice of tradable assets
  • Effective customer support’s work
  • Depositing and withdrawal of funds is carried out without problems

Safety

The platform offers customers the following security measures for the safety of funds:

  • Two-factor authentication and Google Authenticator
  • Usage of a list of allowed IP addresses.
  • Whitelist to withdraw funds

Verification

Verification is optional. Verification of identity data takes 1-3 days. After starting the verification process, there are 15 minutes to complete the procedure. You can try to pass verification up to 3 times, after the third deviation you will have to wait 24 hours before the next attempt.

Non-verified users can withdraw 2 BTC or equivalent every 24 hours. Verified users can withdraw 100 BTC or equivalent every 24 hours. If you want to increase the limit on withdrawals over 100 BTC, you need to contact support.

Limits

The daily limit on the depositing of fiat funds is $100000 or the equivalent. The daily amount of depositing cryptocurrency are is unlimited. You can deposit your account with both cryptocurrency and fiat currencies: EUR, GBP, HKD, KZT, NGN, RUB, TRY, UAH. Depositing is available using a VISA / Mastercard card (debit or credit) or an electronic wallet - AdvCash Wallet, Epay Wallet, Fasapay for different currencies. When depositing with a bank card through AdvCash, the commission is 3%.

Daily withdrawal of funds is limited to 2 BTC for unverified users and 100 BTC for verified users. The commission for withdrawing cryptocurrency is different for each crypto, regardless of the amount of funds withdrawn: for BTC it’s 0.0004, for ETH it’s 0.003. A full list of cryptocurrencies available for withdrawal and fees for them can be found on the official website of the exchange.

Fiat funds can be withdrawn to VISA, Mastercard or AdvCash, Payeer, Epay Wallet, Fasapay electronic wallets. The exchange does not charge a fee for withdrawing fiat currencies, but a commission of 2% will be charged for withdrawing to a bank card through Advcash.

Bybit - $102 billion


Bybit is a crypto derivatives trading exchange launched in 2018 and registered on the British Virgin Islands, but with headquarters in Singapore and Shanghai. The founder is Ben Zhou. Bybit only works with perpetual futures. Derivatives trading volume for the first quarter of 2020 is $102 billion.

Reputation

Since the start of operation, there have been no failures or delays on the exchange, thanks to the high speed of order processing, which is 100000 transactions per second. Bybit has established itself as a conscientious project that has never lost customers’ funds.

The disadvantages of the exchange:

  • Lack of fiat payments
  • A limited list of assets to trade

Safety

For the safety of funds, customers are offered only two-factor authentication, using sms, email or Google Authenticator. Security of customer funds is ensured by moving funds to offline multi-sig wallets.

Verification

There is no obligatory verification on the exchange, to work on Bybit you will need an email address and a phone number.

Limits

There are no limits and commissions for depositing and withdrawing funds, only the blockchain commission is charged, depending on the network load. Also, Bybit does not work with fiat currencies.

Conclusion

According to the results of the first quarter of 2020, Huobi takes the 1st place in the trading volume of crypto derivatives, OKEx takes the 2nd place, BitMEX takes the 3rd place. Although OKEx took 1st place in early March, 2020, in April it failed to consolidate positions. Binance takes 4th place, with only perpetual futures, which indicates favorable prospects for the future if new derivatives are added. Bybit is on 5th place, it’s a young platform that has already managed to beat its place on the list of leaders.

Last year’s leader BitMEX has lost more than 50% of the share in the crypto derivatives segment over the past six months, but it still remains attractive to customers, due to the lack of obligatory verification and limits on depositing and withdrawal of funds.

Author: Kate Solano for Сrypto-Rating.com
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