Summary of main points

1. $14 trillion transaction volume In the first quarter of 2021, TokenInsight tracked 51 digital asset exchanges related to perpetual contract business related transaction data. The digital asset perpetual contract transaction volume reported $14.32 trillion, surpassing the digital assets of the entire year of last year. Derivatives trading volume;

2. $395.1 billion Affected by multiple factors such as speculative sentiment and organized short-selling leading to large-scale liquidation, the perpetual contract market set a record of $395.1 billion in trading volume on February 23 , and the top ten daily trading volume in this quarter is also concentrated Around February 23;

3. Volatility In January, the large-scale selling of mainstream digital assets such as Bitcoin and Ethereum by miners and the organized short-selling actions of institutions in February both had a greater impact on the market, forming two historical volatility peaks. Investors have shown good adaptability to the highly volatile market environment;

4. The 59.4% USDT standard contract continued its strong performance in the fourth quarter of last year and became the most popular contract product in the market this quarter. Its trading volume reached 8.51 trillion US dollars in the first quarter, accounting for 59.4 of the total market volume. %;

5. Compliance Due to the high risk and high speculative nature of perpetual contracts, countries have relatively strict supervision of such products, resulting in a relatively small scale of compliance transactions. Among the 51 exchanges counted in the first quarter of 2021, only Kraken is the only exchange that can operate perpetual contract-related transactions in compliance;

6. User growth Huobi exchange’s perpetual contract holdings increased by 288.3%, FTX exchange holdings increased by 313.8%, far exceeding the increase in the price of Ethereum (162.3%), trading activity and user groups expanded significantly;

7. Classification Currently, digital asset exchanges involved in the perpetual contract business are divided into five categories: large comprehensive exchanges, large perpetual contract exchanges, medium-sized perpetual contract exchanges, compliant exchanges, and boutique exchanges. Boutique Exchanges focuses on niche markets and uses comparative advantages to build competitiveness. The more successful strategies include the development of new business lines, targeted operation of specific digital asset trading pairs, and optimization of trading systems for specific customer groups.

Preface

Perpetual contracts are “gifts from God” in the digital asset derivatives market. In the first quarter of 2021, under the catalysis of the bull market, the number of exchanges carrying out perpetual contract-related businesses has increased to 51. In the first quarter alone , the volume of perpetual contracts has reached 14.32 trillion U.S. dollars, surpassing the full-year derivatives trading volume of last year. It even slightly exceeded the spot market volume this quarter.

Regarding the definition of perpetual contracts, there have always been two different voices in the market. One thinks that perpetual contracts are a variant of futures, which belong to “futures with no expiration date” and should be classified as pan-futures; the other believes that perpetual contracts are actually derived from “contracts for differences (Contract of Difference). Difference, CFD), a high-risk and strictly regulated, previously limited to swap (Swap) derivatives used by institutions.

At present, most exchanges in the market classify perpetual contracts as futures products, and most users think so. However, if you analyze the perpetual contract products, you can find that the perpetual contract is a derivative with regular and regular exchange of cash flows. Both the long and short sides can complete the regular profit and loss swap without holding the spot. The core mechanism is similar to that. There is a big gap in traditional derivatives such as futures. Therefore, from the perspective of mechanism, it is more appropriate to classify perpetual contracts as “standardized swap derivatives”.

Therefore, in this quarterly report, TokenInsight separated perpetual contracts and futures separately, and produced an independent “Research Report on the Perpetual Contract Trading Industry for the First Quarter of 2021”. The main contents include market macro dynamics, exchange performance, and different types. The four parts of perpetual contract product performance and user group characteristics, strive to comprehensively describe the perpetual contract market from multiple angles and aspects, for traders who intend to participate in contract transactions and exchange operators who intend to participate in the perpetual contract market, from data Provide corresponding information from a level perspective to assist decision-making.

In addition to traditional macro and micro transaction data, TokenInsight has also integrated perpetual contract transaction data, and measured it through measurement and quantitative methods. It has obtained some interesting findings in terms of factors affecting perpetual contract transactions and user characteristics. Provided in the report for the reference of investors and exchange operators.

You can log on to the official website tokeninsight.com to view real-time transaction data on different exchanges, different types of contracts, and different underlying asset contracts in the perpetual contract market anytime, anywhere. For more information on the digital asset perpetual contract market in the first quarter of 2021, Please Enjoy the Report.

Wayne, TokenInsight CEO

[email protected]

2021.04.23

1. Industry Tracking

Jan

① The British ban on the sale of digital asset derivatives to retail users formally came into effect on January 6, 2021;

② Polkadot Ecological Comprehensive Index (DOTECO) 1-20 times USDT perpetual contract is listed on Binance Exchange;

③ Binance launched BTCBUSD 1-50 times perpetual contract and adjusted the liquidation rate of U-standard contract liquidation;

④ Huobi launched 20 types of U-standard perpetual contracts in January;

⑤ FTX launched its platform currency FTT perpetual contract;

⑥ Perpetual Protocol ranks sixth in DEX in terms of weekly trading volume.

Feb

① DOGE USDT perpetual contract will be launched in January with Huobi leverage multiples of 1-17X, DOGE USD perpetual contract will be launched in February with Ouyi OKEx leverage multiples ranging from 0.01 to 75x. Binance will adjust the DOGE USDT perpetual contract leverage from Adjust 1-25 times to 1-50 times;

② SOL USDT perpetual contract will be listed on OKEx in January and Huobi will be launched in February;

③ BitMax has launched the perpetual contract swap mode;

④ The blockchain storage protocol Arweave pass AR is listed on FTX;

⑤ Decentralized derivatives exchange dYdX launched the second-tier expansion plan StarkEx launched a new cross-margin perpetual contract internal test alpha version on the mainnet;

⑥ The MXC matcha contract is launched in the full position mode, and unrealized profits can be used as margin.

Mar

① The LUNA U standard perpetual contract will be listed on Binance in January, Huobi and Gate.io in February, and OKEx in March;

② ONE U standard contract will be listed on Binance and Huobi in March;

③ Perpetual Protocol, a decentralized perpetual contract, will be listed on Binance and OKEx;

④ Huobi Contract can now provide Turkish users with digital asset derivatives trading services, including USDT-based perpetual and currency-based perpetual contract types;

⑤ CAKE perpetual contract goes online on Gate.io;

⑥ BitMEX appoints a partner of PricewaterhouseCoopers as the chief financial officer;

⑦ AscendEX (formerly BitMax) has launched the ETH USDT perpetual contract.

2. Ecological picture of the digital asset exchange industry

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

3. Trading dynamics

3.1 Market volume

“In the first quarter of 2021, the trading volume of perpetual contracts reached US$14.75 trillion, surpassing the total trading volume of derivatives last year and becoming the absolute mainstream in the derivatives market.

In the first quarter of 2021, TokenInsight tracked a total of 51 digital asset exchanges related to perpetual contract business related transaction data, basically covering most exchanges with perpetual contract business in existence. As a swap derivative, although the design and business operation of perpetual contract products are relatively simple, there are still certain thresholds. Therefore, as of now, the exchanges involving perpetual contract-related businesses in the digital asset market are only complete. About a quarter of the total number of spot exchanges in the market.

However, after development in 2020, perpetual contracts have become the absolute mainstream in the derivatives market. In the first quarter of 2021, the trading volume of perpetual contracts reached US$14.32 trillion, surpassing the total turnover of the derivatives market last year (approximately US$13.04 trillion).

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Total market volume of perpetual contracts in the first quarter of 2021, source: TokenInsight

From the perspective of the trading volume of mainstream digital asset products, the perpetual contract is already comparable to the spot in the market. Compared with the trading volume of the perpetual contract, the spot trading volume in the first quarter of 2021 is even slightly lower. 14.11 trillion US dollars. As a highly speculative derivative, the high volume of perpetual contracts shows that the digital asset market is unprecedentedly active, but it also means that the speculative sentiment in the market is higher than before.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Comparison of the trading volume of mainstream products in the digital asset market in the first quarter of 2021, source: TokenInsight

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Monthly trading volume of perpetual contracts in the whole market in the first quarter of 2021, source: TokenInsight

“Since late February, the volume of perpetual contracts has continued to be higher than that of the spot. The volume of perpetual contracts is closely related to market speculative sentiment and long-term U.S. bond interest rates.

In the first quarter of 2021, the average daily total trading volume of various perpetual contracts in the digital asset market reached 159.14 billion U.S. dollars per day, a record high in history. With the rise in speculative sentiment, the volume of perpetual contracts began to rise in January and reached its peak in late February. Affected by multiple factors such as speculative sentiment and organized short-selling leading to large-scale liquidation, the perpetual contract market set a record volume of US$395.1 billion on February 23, and the top ten daily volume in this quarter were mostly concentrated on February 23 Around the day.

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研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Market-wide perpetual contract and spot daily trading volume in the first quarter of 2021, source: TokenInsight

In March, market enthusiasm declined slightly, but compared with January and February, the volume of spot transactions began to be lower than that of perpetual contracts. This situation continued throughout March and was the first time in the history of the digital asset market. This seems to indicate that investors who hold speculative sentiment are occupying the majority, and they are more inclined to use highly leveraged derivatives to use a small amount of funds for short-term operations.

By regressing the relevant influencing factors of perpetual contract trading volume, TokenInsight found that, overall, the price of mainstream digital assets does not have a significant impact on the trading of perpetual contracts, while the market’s speculative sentiment (based on mainstream digital asset spot and perpetual The historical volatility of the contract is reflected in the form) has a significant impact on the volume of perpetual contracts. The reason is that, as a speculative investment tool, perpetual contracts contain users’ predictions on the direction of future market spreads in the transaction process, which reflects investors’ subjective views on future market fluctuations. In the case of high volatility, the possibility of investors being forced to close their positions and the possibility of frequent operations are both greater, resulting in a substantial increase in trading volume.

It is worth noting that the volume changes of perpetual contracts in the first quarter of 2021 are also closely related to some factors from the traditional market. In the regression results, the 10-year U.S. Treasury interest rate is significantly positively correlated with the volume of perpetual contracts, and the influence is higher than other factors.

One possible explanation is that long-term U.S. Treasury interest rates reflect inflation expectations in the market. The rise in long-term interest rates on U.S. Treasuries means that short-term interest rates fall and inflationary pressures rise. At this time, investors often choose to purchase anti-inflation assets or allocate more funds to high-yield investment products. Unlike the past, since last year, the proportion of investors who regard digital assets as anti-inflation assets and high-yield investment products has increased significantly, which has led to a large number of digital assets purchases by institutional and individual investors, and the prices of digital assets have risen.

Taking into account the high cost of holding the spot, and the perpetual contract price anchors the spot, and leverage can be used, only a small amount of margin can be used to obtain a nominal spot position of the same size. However, due to the existence of the fund rate, the actual effect of holding perpetual contracts is not as good as holding spot. In addition, the overall risk of holding a perpetual contract is higher than that of the spot. However, considering the lower capital allocation cost and higher capital utilization efficiency, for individual investors and some institutional investors, using perpetual contracts as a high-yield investment tool and a risk hedging tool under limited asset size is also An acceptable option.

3.2 Historical volatility

“In the first quarter of 2021, the historical volatility of perpetual contracts has gradually converged, and investors have shown good adaptability to the highly volatile market environment.

The historical volatility of perpetual contracts measures the volatility of perpetual contract returns and can also be used as a reflection of speculative sentiment in the market. Compared with the previous quarter, the historical volatility of mainstream asset perpetual contracts continued to be at a relatively high level in this quarter. Among them, the large-scale sell-off of mainstream digital assets such as Bitcoin and Ethereum in January by miners and the organized short-selling operations of institutions in February both affected the market. This caused a greater impact and formed two historical volatility peaks.

The highest value of volatility occurred on January 13th when digital asset miners concentrated on clearing highs. Under the influence of the sharp “roller coaster” fluctuations in prices in the short term, the market experienced widespread panic. The historical volatility reached around 183. The perpetual contract market volatility was also the highest in the first quarter. However, investors have shown good adaptability to the highly volatile market environment: Although market emergencies similar to January continued to occur in the following two months, their influence on investors gradually weakened. The currency price volatility caused by large-scale short-selling by institutions in February was even higher than that in January, but the impact on historical volatility was limited compared with that in January, and the highest did not exceed 150; and the quarter-end delivery of options that occurred in March was related to the institution’s Suspected short selling did not have a significant impact on the perpetual contract market.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Comparison of historical volatility of mainstream digital asset perpetual contracts and BTC prices in the first quarter of 2021, source: TokenInsight

4. Exchange analysis

4.1 Overall comparison of exchanges

“The monopoly of large-scale integrated exchanges on the perpetual contract trading business in the digital asset market has been broken, and market competition is relatively sufficient.

Compared with 2020, in the first quarter of 2021, a large number of exchanges with medium-scale perpetual contract business (quarterly trading volume between 100-500 billion US dollars) broke the original structure of several large exchanges in the perpetual contract market. Monopoly situation. The top three exchanges (Binance Futures, Huobi Futures, Bybit) accounted for 46.2% in the first quarter of 2021, while the top ten exchanges accounted for 76.84% of the market’s trading volume. Small exchanges and decentralized exchanges have also obtained about a quarter of the market share, and the overall market competition is relatively sufficient.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

The trading volume of some mainstream perpetual contract exchanges (excluding exchanges with abnormal trading volume) and market concentration in the first quarter of 2021, source: TokenInsight

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Distribution of perpetual contract trading volume in the whole market in the first quarter of 2021 (based on the trading volume announced by CoinGecko), source: TokenInsight

Compared with the same period last year, the transaction scale of perpetual contracts has expanded more than ten times. For exchanges involved in perpetual contract business, in the first quarter of 2021, three exchanges’ perpetual contract quarterly volume exceeded one trillion U.S. dollars, and the volume of nine exchanges was between 500-1,000 billion U.S. dollars. 22 The quarterly trading volume of domestic exchanges is more than 100 billion U.S. dollars.

Among them, Binance Futures and Huobi Futures still occupy the top two positions in the market. Compared with 2020, the trading volume of Binance Futures exceeded US$3 trillion in the first quarter, reaching US$3.71 trillion, surpassing the sum of the second and third places, and its market share increased by 3.18% compared with the fourth quarter of last year. 25.93%, achieving a “double lead” in the spot and perpetual contract markets; Huobi Futures ranked second with a trading volume of US$1.87 trillion, occupying a market share of 13.05%, but its performance in the traditional delivery futures contract market was better. Binance is better.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Top 3 perpetual contract exchanges’ trading volume ranking in the first quarter of 2021, source: TokenInsight

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Distribution of trading volume of the top five perpetual contract exchanges (differentiated by exchange type), source: TokenInsight

Comprehensive exchanges occupying more market share in the perpetual contract market is another important feature in the first quarter of 2021. Compared with last year, the top ten exchanges for perpetual contract trading volume, except Bybit, are all comprehensive exchanges; among the top five exchanges by trading volume, the trading volume from professional derivatives exchanges only accounts for the total market volume. The volume was 7.22%. Among the professional derivatives exchanges, Bybit performed best this quarter, with trading volume exceeding one trillion U.S. dollars, followed by Hopex and other exchanges with a transaction size of about 500 billion U.S. dollars; under investigation and prosecution by the SEC (United States Securities Regulatory Commission), the new exchange Influenced by factors such as the rise, the market share of the established exchange BitMEX decreased to 2.56% this quarter, and the quarterly trading volume was only 366.38 billion U.S. dollars, falling out of the top ten.

The close relationship between perpetual contract trading and spot trading is a possible reason for the comprehensive exchange to gain more market share. By measuring the relevant factors that affect the trading volume of perpetual contracts, TokenInsight found that spot trading volume and perpetual contract trading volume also showed a significant positive correlation. Spot trading volume increased by 1%, and perpetual contract trading volume increased by 0.69%. This means that most of the perpetual contract volume comes from the diversion of spot transactions. When investors participate in spot transactions, they are attracted by the high leverage and high capital utilization of perpetual contract transactions, and thus begin to participate in perpetual contract transactions. This is undoubtedly more beneficial for comprehensive exchanges that have businesses such as spot, perpetual contracts, and delivery of futures and options at the same time: users save cross-exchange related costs.

4.2 Exchange classification

In this quarterly report, TokenInsight divides the current digital asset exchanges involving perpetual contract business into large-scale comprehensive exchanges and large-scale perpetual contract exchanges based on indicators such as quarterly transaction scale, business coverage, compliance, and comparative advantages. , Five types of medium-sized perpetual contract exchanges, compliant exchanges, and boutique exchanges. In addition to perpetual contract trading, large comprehensive exchanges also operate spot, delivery futures contracts, OTC trading and other businesses; large and medium-sized perpetual contract exchanges are mainly engaged in the trading of digital asset derivatives such as perpetual contracts; compliance exchanges focus on providing Compliant perpetual contract trading services; boutique exchanges focus on niche markets and use comparative advantages to build competitiveness.

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研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Classification standard for digital asset perpetual contract exchanges in the first quarter of 2021, source: TokenInsight

4.3 Large-scale comprehensive exchange

“69.62% of the perpetual contract trading volume in the first quarter was concentrated on large-scale integrated exchanges, and the perpetual contract trading volume generally surpassed other products.

In the first quarter of 2021, 69.62% of the market-wide perpetual contract volume came from large integrated exchanges. Except for OKEx, the trading volume of perpetual contracts on most large comprehensive exchanges is much higher than that of delivery futures and other derivatives. Compared with 2020, perpetual contracts have become the business with the largest proportion of transactions in large comprehensive exchanges, as shown in the following figure:

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

The proportion of different types of product transactions in some large comprehensive exchanges in 2021, source: TokenInsight

Take Huobi, Binance and other comprehensive exchanges with perpetual contract volume exceeding one trillion as an example. In these exchanges, the proportion of spot trading volume has continued to decline from 2020 to the present, and dropped to 35.47% in the first quarter of 2021. (Binance); Huobi, OKEx and other exchanges accounted for about one-fifth of the spot trading volume, while FTX and other large and medium-sized comprehensive exchanges even accounted for less than 10% of spot trading.

In contrast, the perpetual contract business accounted for about 60% of Binance and Huobi in the first quarter. OKEx’s traditional advantage is in the delivery of futures contracts, but the volume of perpetual contracts has reached 28.07%; 86.74% of FTX’s volume comes from perpetual contracts, which is much higher than the overall market share of 46.74%. Data shows that since the beginning of the bull market in October 2020, with the gradual rise in speculative sentiment, perpetual contracts have replaced traditional products such as spot and delivery contracts, occupying the core position of derivatives trading and even the overall business of exchanges.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Daily volume changes of perpetual contracts on large comprehensive exchanges in the first quarter of 2021, source: TokenInsight

4.4 Large Perpetual Contract Exchange and Medium Perpetual Contract Exchange

“Bybit Exchange ranks first in perpetual contract trading volume among professional derivatives exchanges, and medium-sized perpetual contract exchanges have their own unique characteristics.

Due to the strong correlation between perpetual contract transactions and spot transactions, and at the same time, comprehensive exchanges have relatively low thresholds for entering the perpetual contract market. Under the background of bull market comprehensive exchanges’ aggressive entry into the perpetual contract business, professional derivatives trading in this quarter The overall performance of its perpetual contract business is relatively poor. BitMEX was further affected by the regulatory turmoil, and this quarter opened a large gap with competitors such as Bybit. Bybit continued its good performance in the fourth quarter of 2020. This quarter, the volume of perpetual contracts reached US$1.03 trillion, ranking third in the perpetual contract segment and the best performance among professional derivatives exchanges.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Daily trading volume changes in large and medium-sized professional perpetual contract exchanges in the first quarter of 2021, source: TokenInsight

Facing strong competition from comprehensive exchanges, some professional derivatives exchanges with medium perpetual contract trading scale (quarterly trading volume of 100-500 billion US dollars) shifted their efforts to derivatives with a certain threshold in the first quarter. market. Deribit maintained its dominant position in the options market in the first quarter, with its options trading volume accounting for 65.63% of the digital asset options segment; while Prime XBT chose to strengthen its connection with the traditional market and gradually develop foreign exchange, bulk commodities and indices Futures trading business, while developing interactive business between the digital asset market and traditional markets: The exchange announced that it will soon be able to use digital assets such as ETH and USDT/USDC as margin to trade foreign exchange, bulk commodities and index futures contracts in an attempt to seize new details Sub-market. Other medium-sized perpetual contract exchanges have chosen to follow a strategy similar to Bybit and exert their efforts in mainstream contract trading pairs, forming a unique competitive situation among medium-sized perpetual contract exchanges.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

The proportion of transactions between large-scale perpetual contract exchanges and medium-sized perpetual contract exchanges in the first quarter of 2021, source: TokenInsight

“In the past, large exchanges relied on their strong resource reserves and financial strength to have a crushing competitive advantage when expanding into new areas. However, for investors, product experience, capital rate rules, lightening mechanism, insurance payment, Liquidity, etc. are all related to the actual interests of investors. In the end, everyone will find that powerful products and sufficiently professional services are the tools to attract users. The digital asset derivatives market is still in a very early stage of development, and I believe that there is not a single transaction. I dare to beat my chest to ensure that I have achieved the ultimate in digital asset contract products.”

—— CoinEx

Open interest is another important indicator that reflects the performance of the exchange’s perpetual contract business. Considering that the open interest of a perpetual contract is the product of the price of the underlying asset and the number of open positions, if the increase in open interest exceeds the increase in the price of mainstream digital assets, it generally indicates that the exchange contract size has increased and trading activity is high , The user group is more likely to expand.

TokenInsight collected and compared data on changes in the holdings of 8 typical large-scale comprehensive exchanges and perpetual contract exchanges, and used the changes in the prices of Bitcoin and Ethereum during the year as a reference standard. The data shows that the comprehensive exchange has certain development advantages in perpetual contracts, and the degree of open interest expansion is relatively high: compared with the beginning of the year, the perpetual contract holdings of the Huobi exchange increased by 288.3%, and the holdings of the FTX exchange increased by 313.8%. The price of Hyper-Ethereum increased (162.3%), and the activity of transactions and the expansion of user groups were obvious. Bybit performed well in the perpetual contract exchanges, with a 199.8% increase in open interest compared to the beginning of the year, which is comparable to Binance (193.7%) in terms of business expansion.

It is worth noting that the increase in open interest on OKEx and BitMEX exchanges is close to the increase in Bitcoin price (100.1%), indicating that the number of open positions has a small change compared to the beginning of the year; while Prime XBT tends to focus on traditional markets. , Its open interest in perpetual contracts dropped by 21% compared to the beginning of the year.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Changes in the holdings of some exchanges’ perpetual contracts in the first quarter of 2021, source: TokenInsight

4.5 Compliance Exchange

“Due to the strict compliance of perpetual contract products, the scale of perpetual contract compliance transactions is relatively small.

In the perpetual contract market, due to the high risk and high speculative nature of perpetual contracts, countries have relatively strict supervision of such products, resulting in a relatively small scale of compliance transactions. Among the 51 exchanges counted in the first quarter of 2021, Kraken is the only one that can operate perpetual contract-related transactions in compliance. The quarterly transaction volume was US$53.53 billion, accounting for 0.37% of the total market, and the impact was relatively weak.

However, some institutional and individual investors still have a certain demand for compliant perpetual contract transactions. From the perspective of holdings, the average daily holdings of users on the Kraken exchange remained at around 200 million US dollars this quarter. At the end of the quarter, holdings increased by 84.4% compared to the beginning of the year, slightly lower than the increase in Bitcoin, indicating that its user base may be relatively large. Fixed, which also indicates that compliant perpetual contract exchanges may not be sufficiently attractive for most ordinary users.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Overview of Kraken exchange’s perpetual contract trading volume and open interest in the first quarter of 2021, source: TokenInsight

4.6 Boutique Exchange

“Boutique exchanges focus on market segments or specific digital asset trading pairs to create comparative advantages to gain market share.

In the context of large-scale comprehensive exchanges’ “massive entry” into the perpetual contract market, for smaller exchanges, if they want to survive and gain a certain market share, they need to create a comparative advantage and be in a niche market (niche market). The ability to compete with comprehensive large-scale exchanges in certain market segments ignored by companies with absolute market advantages is the key to survival and development. In traditional markets, similar financial institutions are often dubbed “Boutique”. In the digital asset market, small exchanges that survive and develop tenaciously relying on their own characteristic businesses can also be called “Boutique Exchanges”.

In the perpetual contract market, the current relatively successful survival strategies of boutique exchanges mainly include the development of new business lines, targeted operation of specific digital asset trading pairs, and optimization of the trading system for specific customer groups. Among them, the strategy of targeted development of specific digital asset trading pairs has been proven to be more effective. Early boutique exchanges such as Bybit have successfully obtained a large number of market shares and user groups through this strategy. In the boutique exchanges with small trading volume in the quarter of 2021, HBTC is a typical example of adopting this strategy.

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HBTC’s perpetual contract business mainly focuses on Bitcoin-related perpetual contracts with good market liquidity, including USDT-based Bitcoin perpetual contracts and currency-based Bitcoin perpetual contracts. The contribution of the two transactions to quarterly trading volume exceeds 95 %, reaching 184.4 billion US dollars. Combined with market-wide transaction data, if only the total volume of mainstream digital asset perpetual contracts is calculated, HBTC ranks tenth; overall, with its comparative advantage in Bitcoin perpetual contracts, HBTC’s overall quarterly volume is eighteenth It occupies a market share of 1.35% in the perpetual contract market, and has performed relatively well among the 7 boutique exchanges.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Distribution of perpetual contract trading volume on HBTC exchange in the first quarter of 2021, source: TokenInsight

“In this bull market cycle, we can see that the total market value of digital assets continues to rise. This market is flooding with a large number of new investors, traditional financial institutions, and VCs. Investors’ demand for financial derivatives such as contracts and options will increase exponentially. , There is still a lot of room for development in the derivatives segment, including perpetual contracts. CoinEx has been cultivating the perpetual contract segment in the past two years. We have not pursued surprising success like other brands. We focus more on With regard to the improvement of user experience and asset security, this industry can only make perfect products only when it settles down.”

—— CoinEx

In addition, some exchanges choose to optimize the trading system for specific customer groups in order to gain the favor of specific investor groups. Taking Bingbon as an example, it aims at some investors’ lack of trading experience and difficulty in getting started with derivatives transactions. On the one hand , it reduces the learning cost of users by simplifying the trading interface, and on the other hand, it provides a “document copy” function, which allows investors to Copy the profit strategy of traders in the user community to invest in derivatives. Through the above strategy, Bingbon has gained a place, and has been active in the perpetual contract market segment since its exhibition in 2018.

The protective effect of the “document copy” strategy on individual investors is reflected in the daily trading volume changes of the Bingbon Exchange. Generally speaking, because professional traders have more information, they can use some professional indicators to predict possible trends in the market, especially for non-systematic risks (such as shorting institutions). Generally, individual investors cannot track such information, so when risks arise, they will suffer severe losses due to violent price fluctuations. Through the “copying” strategy, retail investors can copy the operations of professional traders, thereby effectively reducing the possibility of liquidation. On February 23, the organized short-selling of institutions caused a large number of individual investors to experience liquidation, forming the highest transaction peak of this quarter. On the Bingbon exchange, although the transaction volume increased at that time, the increase was much lower than the market. The average range shows that through the copy function, many individual investors or copy the strategies of professional traders, their positions are effectively protected and have withstood the test of the market.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

An overview of changes in Bingbon exchange perpetual contract trading volume in the first quarter of 2021, source: TokenInsight

5. Product overview

5.1 The performance of different standard perpetual contract products

“USDT-based perpetual contracts account for more than half of the market. The currency-based perpetual contract market has further shrunk, and the yen-based perpetual contracts have significant trading volume.

In the perpetual contract market in the first quarter of 2021, the USDT standard contract continued its strong performance in the fourth quarter of last year and became the most popular contract product for investors in the market this quarter. Its trading volume reached US$8.51 trillion in the first quarter. It accounts for 59.4% of the total market volume, more than half; there are also 324.96 billion U.S. dollars in transaction volume from perpetual contract products priced in Japanese yen (JPY), accounting for 2.27% of the market. Japanese investors are in the perpetual contract market The role is worthy of further follow-up and attention.

In contrast, the currency-standard perpetual contract due to its relatively high risk and strong liquidity demand has further reduced its market share. The total transaction volume in the first quarter accounted for 33.3% of the total market, about 4.77 trillion U.S. dollars.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Market share of different types of perpetual contracts in the whole market in the first quarter of 2021, source: TokenInsight

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Comparison of the trading volume of different standard contracts on some major perpetual contract exchanges in the first quarter of 2021, source: TokenInsight

From the perspective of mainstream comprehensive exchanges and perpetual contract exchanges, USDT standard perpetual contracts are the main products of most mainstream exchanges in derivatives, and their trading volume accounts for more than 50%. The perpetual contract of FTX exchanges Contract volume even comes entirely from USDT standard perpetual contracts. The only exception is the Bybit Exchange. The main trading volume of the exchange in the first quarter came from currency-based perpetual contracts, accounting for as much as 85.8%. It has a certain comparative advantage in the currency-based perpetual contract market.

5.2 Performance of different underlying perpetual contract products

“The proportion of non-mainstream digital asset contracts has further expanded, and mainstream digital asset contracts (BTC, ETH) account for slightly more than 70% of the market share.

Perpetual contract transactions in this quarter are still mainly centered on two major digital assets (BTC, ETH). The total volume of related perpetual contracts reached 10.5 trillion US dollars, accounting for 73.35% of the total market volume, of which Bitcoin-related contracts Contributed 8.23 ​​trillion US dollars in trading volume. Compared with the previous quarter, the proportion of mainstream digital asset perpetual contracts has further decreased, and the transaction volume of non-mainstream digital asset contracts accounted for 26.7% of the market share in the first quarter. Among them, the perpetual contracts with BNB, DOT, XRP, ADA and other platform currencies and non-Ethereum public chain tokens as assets performed well, with quarterly transactions exceeding 150 billion U.S. dollars, and DeFi projects as the target perpetual contracts The quarterly contract volume generally did not exceed 100 billion U.S. dollars. Among them, UNI-related perpetual contracts performed the best, with a quarterly volume of 96.44 billion U.S. dollars.

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Distribution of transaction volume of different underlying contracts in the first quarter of 2021, source: TokenInsight

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Volume performance of some non-mainstream digital asset contracts in the first quarter of 2021, source: TokenInsight

6. Popularity and user distribution

6.1 User popularity

“The peak search popularity of keywords related to perpetual contracts coincides with the period of high market volatility. The basic knowledge of user contracts is lacking, and user education is in urgent need of enhancement.

User search popularity can often reflect the worldwide acceptance of certain products and concepts. At the same time, integrating other influencing factors can infer user characteristics to a certain extent.

First of all, it needs to be clear that although perpetual contracts have many similarities with futures, such as margin trading mechanisms, the two are essentially different. However, in the current digital asset derivatives market, the definition of perpetual contracts and futures is not clear. Therefore, in order to cover as much information as possible, the keywords tracked in this quarterly report include related words such as “perpetual” and “futures”.

As shown in the figure below, the time when user keyword popularity reached its peak basically coincided with the period of large-scale fluctuations in market conditions: in the miners’ sell-off wave around January 11, 2021, keyword popularity reached the first time Peak (approximately 33); in the institutional short-selling wave at the end of February, user search interest reached a peak of about 100; and at the end of March during the period of large-scale options delivery for futures, the interest reached its peak for the third time, which also reached about 100 .

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

Google popularity trend chart for keywords related to perpetual contracts in the first quarter of 2021, source: Google Trend; TokenInsight

On the other hand, if the search keyword is set to “perpetual” and other keyword assistance is added, the heat data obtained will be 0 for most of the days. Only when the market conditions change significantly, the heat will be obvious Promote. If the keyword is set to “crypto futures”, the market popularity data will be more complete. By regressing the obtained popularity data with perpetual contract trading volume, futures trading volume, Bitcoin price and other variables, TokenInsight found that the popularity of “crypto futures” has a significant correlation with the perpetual contract trading volume Bitcoin price.然而与交割期货合约成交量相关性并不显著,表明永续合约市场用户对永续合约和期货相关概念理解普遍不清晰,用户教育亟需增强。

峰值度量:热度数值代表相对于图表中指定区域和时间内最高点的搜索热度,热度最高的得100 分;热度是前者一半的为50;无足够数据的为0。

6.2 用户地理分布与关键词分布

“ 永续合约搜索热度与差价合约合法交易地区高度重合,用户搜索相关关键词显示出用户群体强投机性。

永续合约交易用户特征较为鲜明。从地理分布看,搜索永续合约相关词汇的用户与差价合约合法交易地区高度重合,包括荷兰、新加坡、英国、澳大利亚、加拿大、土耳其等国,平均搜索热度均超过50;而在美国等差价合约被宣布为非法的地区,永续合约搜索热度亦相对较低,平均搜索热度低于30。

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

2020年第一季度永续合约相关关键词用户搜索热度地理分布,来源:Google Trend;TokenInsight

从永续合约用户相关搜索关键词角度可以发现,永续合约用户在搜索永续合约相关词汇之外,亦会搜索股市、价格及价格预测、股指及股指期货、保证金交易、DOGE 币、Reddit、Tesla 等相关词汇,而上述词汇在投机用户聚集的网络社区中经常出现,表明永续合约投资者与传统市场投机者之间存在着较强关联性,用户群体整体投机情绪较强。此外,永续合约用户经常搜索的交易所主要包括Binance 与Coinbase,其他交易所在永续合约搜索相关关键词中热度较不明显。

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

2020年第一季度永续合约相关搜索关键词,来源:Google Trend;TokenInsight

7. 监管动态

研报:2021 Q1永续合约成交量报.32万亿,超去年全年

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