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According to FTX US President Brett Harrison, growth in trade items is crucial for the development of crypto-asset markets.
This is what FTX US crypto lacks
In a lengthy Twitter chat, US CEO Brett Harrison alleges that FTX US crypto exchanges lack critical tools that allow investors to diversify risk and hedge their bets.
“If one of the primary tasks of a financial market is to allow for the expression and transfer of risk, derivatives are essential.”
Crypto markets in the United States will not mature to the same level of maturity, maturity, or safety as equities or bond markets without derivatives.
The following are some of the qualities of a mature market that are currently lacking in the US crypto markets: The ability to hedge, insure, speculate on volatility in addition to price, capture interest through basis trading, maximize capital efficiency through margin, and execute simple positions without holding underlying assets.”
Need of derivatives
The Commodities Futures Trading Commission (CFTC) approved FTX’s application to allow margin trading on its derivatives platform in March.
According to Harrison, derivatives are essential for institutional market participation because they allow investors to easily shift capital across many positions without having to hold the entire underlying asset.
One of the advantages of derivatives, he believes, is that direct custody of digital assets is currently impossible for banks.
“Effective risk management solutions will be difficult to find, and cryptocurrency will struggle to attract the institutional capital it requires to mature.”
“We believe that permitting direct margin on FTX US Derivatives, FTX US’s licensed derivatives exchange will significantly accelerate the expansion of crypto derivatives markets in the US,” the business adds.
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Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
