We believe the emergence of cryptocurrency derivatives is the inevitable evolution of the digital asset class and should contribute to reductions in volatility and enhancing market efficiency.
Many virtual currency exchanges advertise the ability to trade products with leverage. In traditional finance, there are a number of popular leveraged products, such as ETFs. An ETF is a product that moves as a function of the underlying factor and the leverage factor. For example, an ETF that has 5x leverage will lose or gain 5% if the underlying asset moves by 1%. Leverage defines your position’s exposure to the underlying asset class.
This is the fourth article of our Digital Assets Decoded series which aims to give you a fundamental understanding of the cryptocurrency space.
What are derivatives? Derivatives have been around for millennia; their use can be traced back to ancient times when people bartered with one another to trade perishable goods such as grain and livestock. They gained widespread popularity during the rise of the financial services sector, when newer valuation techniques were created in the 1970s and rapidly developed the derivatives market. It is difficult to imagine modern finance without derivatives now.
This is the third article of our Digital Assets Decoded series which aims to give you a fundamental understanding of the cryptocurrency space.
The second-largest cryptocurrency by market cap, Ethereum, has had the most significant update in its 5-year history. A major milestone has been achieved on the path to ‘Ethereum 2.0’, also known as ‘Eth2’, which represents a pivotal development in the evolution of the Ethereum blockchain.
This is the second article of our Digital Assets Decoded series which aims to give you a fundamental understanding of the cryptocurrency space. In our previous article, “What is Blockchain?”, we discussed what a blockchain is and how it stores data as a series of events.
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