Published: 18.04.2022
Article reading time:
2 minutes.
FTX.US CEO Brett Harrison expressed concern about the future of the US crypto market due to restrictions on cryptocurrency derivatives.
Brett Harrison Brett Harrison declaredthat new trading features are critical to the development of cryptocurrency markets. He drew attention to the fact that the US cryptocurrency markets lack certain features that allow investors to diversify risks and hedge their portfolios.
“If one of the main goals of the financial market is the ability to express and transfer risk, then the presence of derivatives is crucial. Cryptocurrency markets in the US will not reach the level of development, maturity, or safety seen in equity or bond markets without derivatives,” Harrison said.
The head of the US division of FTX added that among the features of the developed market, which are not currently available in the US cryptocurrency markets, one can name the ability to easily hedge, hedge your positions, speculate on volatility in addition to price, earn interest through underlying trading, achieve capital efficiency. at the expense of margin and open positions without owning underlying assets.
Harrison believes that derivatives are essential to ensure institutional participation in the markets because they allow investors to allocate capital efficiently across different positions without owning the entire underlying asset. He argues that it is not yet possible for institutional investors to directly hold digital assets, and this is another advantage of derivatives.
“Tools for effective risk management will remain limited, and the cryptocurrency will not attract the institutional liquidity needed to mature,” he said. “We believe that FTX.US’s application to the CFTC to allow direct margin on a regulated derivatives exchange will significantly accelerate the development of cryptocurrency derivatives markets in the US.”
The exchange filed an application for margin trading permission for its derivatives platform with the U.S. Commodity Futures Trading Commission (CFTC) in March. In early April, FTX.US restricted the listing of crypto assets due to regulatory uncertainty. Now the site offers its customers only 27 crypto assets, which is much less than the 322 offered by the parent company.
Source: Bits
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