In the letter
- Binance saw the highest futures trading volume ever in August.
- The futures offerings totaled over $ 195 billion in Bitcoin and various altcoins.
- The exchange said the rise of DeFi projects fueled the rush for altcoin futures.
The crypto exchange Binance had its best month to date for its futures offering with trading volumes in the billions across all altcoins, the company said in its report Market outlook August.
In the futures markets, investors can place leveraged bets on the price movement of an asset without necessarily buying that asset. They also allow traders to take advantage of declines in price by betting against the market, as opposed to spot trading, where investors can only buy and hold one asset or sell it for a loss to fiat.
As one of the largest exchanges in the crypto space in terms of volume and retail participation, Binance has taken advantage of a booming futures market led by the rise of various DeFi projects.
Binance announced it listed over 17 new futures contracts in August, including DeFi projects like YFI token from yield aggregator Yearn Finance – and even its Chinese fork. “YFII“-among other.
In August alone, Binance’s altcoin futures market share rose to 41% and stabilized in the 35 to 40% range over the past week. The exchange even marked one of the highest one-day altcoin futures volumes at over $ 5.8 billion on August 14, the report said.
“A significant portion of the volume growth is being attributed to altcoin contracts as traders turn their attention to altcoins. [and] especially cryptocurrencies related to DeFi, ”said the company.
Overall, the volume of Binance futures rose 79% from the previous month to USD 195 billion, the highest monthly volume since its inception. As the altcoin volume increased, the dominance of the total volume of bitcoin decreased over the course of the month.
Altcoin futures have dominated their Bitcoin counterpart. Image: Binance
DeFi markets promote altcoin trading
According to Binance, much of the activity in the altcoin space has been traced back to investors who have bet on a variety of new projects.
Last month, obscure DeFi projects with weird-sounding names like Sushiswap and Kimchi Finance reflected the efforts of earnings aggregator Yearn Finance to offer investors various yield farming projects to other traders and earn interest rates of up to 100,000% on an annual basis.
The onslaught has caused Total Value Locked (TVL) across the DeFi ecosystem to surpass a mammoth value of $ 8 billion. Of this, projects such as the decentralized exchange of Uniswap are accounted for by over $ 1.66 billion alone in TVL.
However, not all industry observers are convinced of these key figures. Some claim that the current market is a bubble-like behavior Last seen in the first coin offering insanity in 2017.
But until then, Binance is having a great time.