July 11, 2022
Futures spreads trading has become a huge priority at Paradigm and for good reason.
Last year, we made true futures spreads trading a reality when we released the Futures Spread Dashboard (FSPD). Volume has been growing with each month, but June 2022 has blown the doors off old volume records. A significant reduction in blocked futures clearing at Deribit has certainly helped bolster these numbers, and we’re now running with this success and bringing futures trading out to the masses.
We’ve launched a major initiative here at Paradigm to educate traders on the use cases and advantages of spreading crypto futures. Some material has already been released, and you can expect to see more in the second half of this year.
- Zero fee
- No leg risk
- Ability to take leverage in larger size than individual legs
- Better than screen pricing and quantities
- Multiple settlement venues
Futures Spreads Are 🆙
As mentioned earlier, we’ve had a tremendous month for futures spreads volume. Most encouragingly, volume has continued to trend higher after an initial spike connected to Deribit’s fee reduction in early June. It’s clear that traders have taken to Paradigm’s single-click spread execution that eliminates leg risk. Recent trade data shows our FSPD 7-day ADV coming in at more than 2x our 30-day ADV, and recent 24-hour volume coming in at more than 2.5x the 7-day average.
In terms of Bitcoin, we’re proud to report a 7-day ADV of nearly 1,800 and a recent daily total of more than 4,500 Bitcoin futures transactions.
Looking at a monthly chart, you can see that June 2022 will be our second consecutive record volume month.
While most of the volume has been settled at Deribit, we’ve seen an increase in volume directed to Bybit, with just shy of $6M in transactions directed there so far this month.
We’ve also released two pieces covering yield curves and how they may impact spreads trading. These pieces examine some tools in the TradFi space that have yet to make their way to crypto. They were very timely, as they looked at how bank lenders hedge their risk exposure using Eurodollar futures.
In other big news, we’ll be launching futures spreads mid-July with FTX, the world’s leading regulated crypto exchange. While our current volumes look impressive, we believe this market will continue to surge. Coupled with our new partner, we may easily see volume increase by 5x by the end of Q3.
The Paradigm Team 💜