The Future of Crypto Derivatives

The options market for crypto is still fairly new. Many new exchanges and firms are popping up looking to fill a spot in the rapidly growing industry. Recently, the market for options on Ether passed Bitcoin for the first time ever.

According to CoinDesk, Deribit is the largest market for cryptocurrency options controlling roughly 90% of the world volume for the options.

Although, the market for Bitcoin futures is still higher, Ether has been showing some positive sentiment as of late.

Over the past month Ether has outperformed Bitcoin at a fast pace. The news of the merge has gotten investors excited for what's in store for the blockchain. Talks have come up once again about "the flipping". One day or potentially in the near future, the market cap of Ethereum will surpass Bitcoin. This seems to be a growing possibility because of the deflationary effect the merge will have.

Options exchanges for cryptocurrency has always been a difficult business to get into. The regulations in the US have always been strict and unclear. Only recently has the SEC started investigating ICOs and exchanges like Coinbase. There is still uncertainty for ICO, exchanges and derivatives.

Once more regulatory clarity is set in stone, bigger institutional investors/banks will be more comfortable entering the industry. How will the government regulate crypto exchanges? Derivatives are considered high risk securities that control a significant amount of capital, is this something that regulators are willing to work with?