TokenInsight 2021Q1 Crypto Futures & Options Market Research Report

May. 2021 TokenInsight.com TokenIn.cn [email protected] 02. Executive Summary 02. Executive Volume Trading Market 04. Futures Basis 07. Market Market Premium 09. Options Overall Situation 11. Exchanges Exchange Futures/Options 13. Large 15. Compliance Exchange Overview 17. Options Product 20. Options User Features 18. Options/Futures Searching Popularity Searching 18. Options/Futures 12. Exchanges Category 12. Exchanges Category Exchange Futures/Options 14. Emerging Overview Product 16. Futures 06. Futures Market Position Market 06. Futures Volume Market Trading 08. Options Skew 10. Volatility 01. Foreword 01. Foreword Prospect 03. Industry Content

FIND, CREATE, AND SPREAD VALUE IN . 2 2021.05.02 [email protected] Wayne, TokenInsight CEO provides a lot of information about futures Changes in the market share of exchanges are also one of the focuses of this report. Due to the limited expansion of competition" user has groups, begun fierce between "stock major exchanges options in market segmentation. For smaller the exchanges, how to survive this futures and situation is a crucial issue. compliance At exchanges the this quarter same exceeded time, $100 time, the and they billion are gradually trading for catching up with volume the the centralized exchanges first of fierce. competition even more in the crypto asset market, making TokenInsight official website and options market. Now you can view trading real-time data on different exchanges, different types of contracts contracts and in the options market anytime and anywhere, different and relevant real- underlying asset be available soon. market will also time data on the futures Insights, and Find the Next Step. Please Enjoy the Report, Read Our With the gradual increase in the proportion of professional the investors in futures market segmentation, the hedging tool and risk hedging tool has gradually become higher than the "tool attribute" of futures as "speculative attribute", a so that the impact of the spot market on futures has become no more significant; which is mainly determined by the behavior of professional volatility skew, in the options market, investor the groups, options plays an crypto assets. mainstream effective role in predicting the prices of investors, including various institutions. futures Combining and the options the market, we can observe trends the views and of influence of the their actions on the crypto asset market. This TokenInsight combined is options another and reason futures why in this quarterly report and listed perpetual contracts separately. There is no doubt that this is a "neglected corner" in the bull market. is no doubt that this is a "neglected There However, the importance of the futures and options ignored. market As speculators generally turn cannot to perpetual contracts, be the futures and the options market has gathered a large number of professional exchanges involving options business. In large exchanges, except for OKEx, the volume of futures contracts has generally less accounted than for one-fifth; while the proportion of options for trading, except a small segmentation, number can of even exchanges. exchanges be that ignored are in active the in business market of most accounting for 6.77% of the total market volume; while the volume of options contracts was $133.32 billion, which was only 0.44%. The number of exchanges that carry out futures and options business is relatively small: In 2021 Q1, except for centralized exchanges, there are only 17 exchanges involving futures business and only about 10 not include perpetual transactions, contracts. please go to the official website to of read the TokenInsight For Q1 Report". Research Perpetual Contract Trading "2021 Q1 Crypto perpetual contract related The quarterly total volume of futures contracts was $2.07 trillion, Foreword This report is a Q1 research of (delivery) futures and options, and does

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 3

Compared the proportion The above character enables

from from indicators such as the long-short ratio that individual As speculators turn to the perpetual contract market, of professional investment in Q1. gradually increased groups in the futures Compared market with last has year, the relatively little. But on the one options hand, the infux of individual investors is investor group has changing the structure of the options market; on changed the other hand, it can be found investors in the options market are and mature. gradually becoming rational There There is a signifcant volatility negative skew correlation of mainstream between crypto asset the options future current and price the of near- the underlying asset. to a certain extent. price trends future to predict volatility skew Non-mainstream crypto asset options have developed. with their last liquidity year, can be guaranteed to a certain extent, and stable. situation is relatively the overall operation • • • • Although In the futures and Q1 options market trading

for 93% and 88% of the trading volume, with respectively. Compared last year, the changes stable. was relatively structure were not obvious, and the market Unlike the “all fowers blooming together" in market, the the perpetual futures and contract options market still continues the pattern old of market "one superpower and many powers". options market segmentation, the top three exchanges accounted The increase of Q1 crypto asset futures contract than position that was of higher for most time, indicating but that lower the overall than growth that of the of futures contract , position group was relatively slow and the investment group was relatively stable. that of perpetual contracts. that of perpetual Excluding exotic options volume reached $133.22 billion, equivalently products, 1.73 times last year's full-year trading volume, and is the best-growing derivative market this quarter. In 2021 Q1, there are 17 business, exchanges with conducting a futures quarterly trading total trading accounting for 6.77% of volume the total market trading volume. of $2.07 trillion, compared with the last volume year, of futures has also risen sharply as the Q1 bull market gradually improved, its growth rate is lower than • • • • Executive Summary Executive

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 4 Centralized DEX Industry Prospect Industry DEX Centralized

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 5 1 87.3% 83.8% Source: TokenInsight Source: Perpetual Contract Perpetual Contract Futures Share Changes Share 16.2% 12.2%

Main Derivatives Market Main Derivatives

21Q1 20Q4 Mar. $602B Changes Volme Trading Total Feb. $684B 2021Q1 Futures Market 2021Q1 Futures Trading Volume Changes Volume Trading Jan. $788B According to TokenInsight data, totally are there 17 exchanges that to According carry TokenInsight out trading futures in 2021 Q1, for 6.77% of the total market volume. volume of $2.07 trillion, accounting with a quarterly total Compared with the fourth quarter, futures to 12.2%. dropped in the derivatives market further market share but its trading gradually improved, volume also rose sharply as the Q1 bull market $800B $400B Perpetual Contract Perpetual 46.74% institutions intensively The clearing of individual investors led to a 6.77% 0.44% Spots 46.06% 2021Q1 Different Types of Products Market Share Market of Products Types 2021Q1 Different The centralized trading of futures contracts happens mostly at the more transactions concentrated at the beginning of the quarter. transactions concentrated at the beginning more gradually become more attractive to speculators. Many individual users choose to investors, close futures contracts especially and turn to perpetual contracts. substantial increase in the proportion of institutional investors, resulting in beginning of the participated quarter. The in reason the is quarter. contracts at the beginning of the futures allocation that of mainstream Perpetual crypto contracts have risen since the second half asset-related of 2020 and have is $2.07 trillion Futures Market Trading Volume Volume Trading Market Futures volume trading market futures 2021Q1 completely different derivatives. The former belongs to futures, while the latter belongs to Swap, futures, derivatives. The former belongs to completely different to delivery contracts and does refers "futures" and need to be distinguished. In this quarterly report, not include perpetual contracts. Note: In the crypto asset market, delivery futures contracts and perpetual contracts are actually two contracts and perpetual contracts are futures Note: In the crypto asset market, delivery Futures Contract Futures Options Contract

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 6 Source: TokenInsight Source: Purchasing futures as a risk Unexpected events that affect price changes have market has gradually become more specialized. market has gradually become more fluctuations, the trading volume reached a quarterly high of $61.86 billion on February 23. none However, of the miners’ selling-off in January and the quarterly options delivery in had March a significant impact on trading. futures As a hedging tool and risk hedging tool, the "tool attribute" of futures is gradually higher than the "speculative attribute". hedging and quantitative hedging allocation investors and institutions. operation for professional tool has for become regularOn a the routine other and hand, professional options are widely combinations used of investment bullish by and hedge against futures risks. Therefore, bearish an increase in strategies groups to futures trading volume in often means an the variousamount of increase options premiums, and in the significant relationship between the two also shows that futures no significant impact on the overall volume. futures trading Although during the institution short period in mid- to-late February, the futures contract suffered panic trading and liquidation due to large price

$31,250 $53,750

$42,500 $65,000 $20,000 3/30

Delivery 3/22 Institution

Quarter End Options Quarter

Short 3/14

Suspected

3/6 2/26

Market Futures Contract Daily Trading Volume Daily Trading Contract Futures Market Price BTC

2/18 2/10 2

1 2/2

Short 1/25 Organized Institution Organized Miners Sell-OffMiners

2021Q1 Whole Market Futures Contract Trading Performance Contract Trading Market Futures 2021Q1 Whole 1/17 Period Intensive Intensive

Transaction Transaction

1/9 1/1 1. https://www.coindesk.com/bitcoin-plummets-as-miners-sell-inventory-spot-markets-panic https://www.theblockcrypto.com/data/crypto-markets/futures 2. https://www.coindesk.com/bitcoin-faces-price-turbulence-as-market-liquidity-falls-says-jpmorgan; the "tool attribute" of futures surpasses the "speculative attribute" the "speculative surpasses of futures attribute" the "tool Futures Market Trading Volume Volume Trading Market Futures and trading, of futures influence the weakened gradually events have market Major $16B $32B $64B $80B $48B

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 7 3/31 Source: TokenInsight Source: 3/17 3/2 2/15 1/31 and Mainstream Crypto Asset Price Changes Crypto and Mainstream 2021Q1 Comparison of Whole Market Futures Contract Position Contract of Whole Market Futures 2021Q1 Comparison 1/16 Futures Contract Position Changes Position Contract Futures Changes Price BTC Changes ETH Price 1/1 0.0% 30.0% 90.0% 60.0% 120.0% 150.0% 180.0% In Most futures positions belong to Bitcoin futures futures contracts, perpetual contracts attracted more bull market new Professional investors and investors institutions play more and to market. in futures important roles more participate in Q1. The main force of futures contract growth comes from professional investors most and exchanges, institutions. contract the positions is significantly growth higher than that futures of rate contracts, of perpetual indicating that compared with is stable. and Ethereum contracts, crypto and asset futures contract the positions is higher increase than that in of Bitcoin Q1 but lower than most time. that of Ethereum for changes of futures market position are stable, with relatively an increase of 125% at the end of the the beginning of the year. with quarter compared The overall growth of the futures contract position group is relatively slow, and the investment group Compared Compared with perpetual contract market, the relatively slow, and the investment group is stable is group the investment and slow, relatively Futures Market Position Position Market Futures is group position contract the futures of growth The overall

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 8

EUR JPY

Annual Basis

AUD

Source: JP Morgan, TokenInsight JP Morgan, Source:

CAD

NZD

CHF

MYR

BRL

CNY

MXN

ZAR

RUB

INR TRY

2021Q1 Comparison of Different Types of Asset Futures Annual Basis of Asset Futures Types of Different 2021Q1 Comparison BTC 6% -1% 12% 18% 24% 30%

. Holders of 1 the entire crypto risk appetite of asset to push up the basis ratio in the bull . ; frequently use frequently leverage valuation premium The Fed's easing policy management institutions has increased the Investors market; In a relaxed low interest rate environment, Bitcoin can enjoy a full 1: https://www.coindesk.com/jpmorgan-bitcoin-etfs-cme-futures-premium 1: https://www.coindesk.com/jpmorgan-bitcoin-etfs-cme-futures-premium portfolio. JPMorgan JPMorgan says that such a premium (20%) is not sustainable delivery contracts also need to pay 20% of the capital cost, and "rational investors" will not bear 20% of the capital cost to build their investment • Reasons for the high premium of Bitcoin futures contracts: of Bitcoin futures Reasons for the high premium • • reached reached over 25% at its highest in Q1. It indicates that asset industry has considerable and stable expected returns. In the absence of credit risk, as long as the spots are held, more than 20% the contract. return will be got by selling of the annualized On the crypto asset exchanges such as , FTX, OKEx, and futures exchanges such as CME, the basis level of Bitcoin futures contracts even Market Basis Basis Market market traditional higher than basis is contract futures Bitcoin

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 9 Source: skew, TokenInsight skew, Source: CME Bitcoin Futures Annual Basis Futures CME Bitcoin As of the end of the CME's quarter, Bitcoin futures delivery contract basis level was only maintained at about 8%, which was close to the traditional market, but other crypto asset exchanges to basis regression. signals related still did not show trends and Since valuation deleveraging pressures restricts the use of derivatives, hinder the basis level of contracts has the CME's become significantly delivery different from other crypto asset rise exchanges after February. of currency prices and the Intervene Regulators Regulators has lowered . 2021Q1 Bitcoin Futures Annual Basis Change 2021Q1 Bitcoin Futures under the supervision

reduce the leverage reduce The rise in real investors' expectations interest for rates the on value financial assets recovery, that do not of have U.S. the ability to generate interest Bitcoin. will be Treasury In Securities the context at a disadvantage. of economic The steadily rising asset prices have caused investment managers to ignore the existence of risks. After a series of liquidation, investors began to gradually Starting from the end of February, the basis of compliance exchanges such the Starting end from of February,

• • as CME began to gradually decline. as CME began to due to multiple factors multiple due to Market Basis Basis Market decreasing is gradually exchanges of compliance The basis

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 10 $133B 2021Q1 Source: skew, TokenInsight skew, Source: $45B 2020Q4 $16B 2020Q3 $60B $45B $9B $30B 2020Q2 $15B Options Market Quarterly Trading Volume Changes Volume Quarterly Trading Options Market $51.73B $38.58B $43.02B

$8B

Jan. 2020Q1 Feb. Mar. Total Trading Volume Changes Volume Trading Total Volume Trading Total 2021Q1 Options Market Monthly Trading Volume Market Monthly Trading 2021Q1 Options $35B $70B $140B $105B

. The main convexity conduct intensive allocation of options for the

concentrated at the end of quarter. the Therefore, quarter and options the beginning transactions beginning and end of to are the hedge fluctuation or concentrated volatility. speculate profit at through the Institutional investors year at the beginning of the quarter; entire quarter or even the entire Options are volatility-related derivatives, and market volatility is mostly

Possible Causes: • • futures contracts, which is a significant increase compared with last year. with last year. compared is a significant increase contracts, which futures Options trading in this quarter showed transactions were concentrated at the beginning obvious and end of the quarter, higher. relatively and the turnover in January was reached reached $133.22 billion, equivalent trading to volume, and 1.73 become times the best-growing quarter. last derivative year's market this annual The overall market share of options market in has the crypto reached asset 0.44%, market and its trading volume is equivalent to 6.42% of Excluding exotic options products, Q1 options market trading volume breakthrough of $1 billion in daily average trading volume trading average in daily of $1 billion breakthrough Options Market Trading Volume Volume Trading Market Options a achieving $130 billion, volume exceeded trading option 2021Q1

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 11 Source: gvol.io, TokenInsight Source: In addition to institutional investors, a number large of professional have individual also begun investors to enter the option market. trading In the Q1 options trading record, in addition to the obviousinvestment strategies (such clues as straddle bull option, to market construct spread) number in of small-value options traders block also used options trades, various a large optionsarbitrage or hedge risks. investment strategiesThe addition of "fresh blood" has brought more to vitality to development of individual the professional investor options is gradually changing groups the customer group market,structure and of dominated by institutional investors. the the original options market In terms of premium, the total amount of Q1 premium reached $5.44 last year ($2.5 billion). than billion, more 2.18 times $0M $75M

$150M

$225M $300M

3/30

3/22

3/14

3/6

2/26 2/18

Market Options Contract Daily Trading Volume Daily Trading Options Contract Market Premium

2/10

2/2

1/25 1/17

2021Q1 Options Market Daily Trading Volume and Premium Changes and Premium Volume Market Daily Trading 2021Q1 Options

1/9 1/1

$1B $3B $5B $2B $4B of professional individual investors began to enter the option trading market trading the option to enter began investors individual of professional Options Market Premium Premium Market Options number a large billion, and $5.44 reached premium amount of total 2021Q1

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 12 Source: TokenInsight Source: $31,250 $53,750 $42,500 $65,000 $20,000 3/26 Quarter End Options Delivery 3/14 Suspected Institution Short 3/2 2/18 2/6 Short 1/25 Organized Institution Organized 2021Q1 BTC Options Volatility Skew and Bitcoin Price Fluctuation Skew Volatility 2021Q1 BTC Options 1/13 BTC Options Volatility Skew (Left) Skew Volatility Options BTC (Right) Price BTC Miners Sell-Off 1/1 0 12 36 24 60 -12 48 -36 -24 -48

the average price decline in the $217.4; subsequent while 24 as hours the was Ethereum about $4.7 in the next 3 days. average price decline was about volatility skew increased by 1, the There There is a significant negative correlation between volatility the skew of current mainstream crypto asset options and the near future price of the underlying asset. enable The the above characteristics volatility skew to certain extent. predict future price trends to a According to Q1 data, as the Bitcoin volatility skew increased by 1, When the difference between the two is greater than 0, it indicates that the market is overheating, and the price is often in a downward between the two is less than 0, when it the difference indicates trend; that the price is lower than the rational price will rise with a high probability. expectation, and then the historical volatility and implied volatility of the options. and implied volatility of the historical volatility Historical volatility indicates the actual performance of the while market, implied volatility represents professional the and subjective institutional expectations investors of as "rational expectations." on usually be regarded the market, which can The options volatility skew is the difference value between market speculation and overheating to a certain extent to a certain overheating and speculation market Volatility Skew Skew Volatility reflects asset options crypto of mainstream skew The volatility Note: BTC option volatility difference is data 1 day ago, ETH option volatility difference is data 3 days ago, that is, the volatility difference on January 1 corresponds to the on January 1 corresponds is, the volatility difference is data 3 days ago, that is data 1 day ago, ETH option volatility difference Note: BTC option volatility difference on January 4. BTC price on January 2 and the price of Ethereum

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 13 $86.7B $1,100B $90B $1,016.0B 1 Source: skew, TokenInsight skew, Source: $68B Options Contract Volume Options Contract $45B $31.7B $825B Futures Contract Volume Contract Futures $23B $5.6B $1.0B $0.7B $0.1B $615.1B Deribit $550B Bit.com Futures OKEx(Futures) Binance(Futures) CMEBitcoinFutures $275B $193.4B $155.8B $29.3B $24.7B $24.0B 2021Q1 Futures/Options Trading Volume of Each Exchange of Volume Trading 2021Q1 Futures/Options Deribit BitMEX Huobi Futures OKEx (Futures) OKEx FTX (Derivatives) FTX Binance (Futures) Binance CME Bitcoin Futures CME Bitcoin OKEx (Futures) OKEx 49% Huobi Futures 30% . Futures 9% 12% Others OKEx is the only futures contract Binance (Futures) Binance Deribit 65% Options 2021Q1 Options and Futures Market Concentration Ratio 2021Q1 Options and Futures As product data on exotic options exchanges and decentralized exchanges is difficult to obtain or is not yet mature, is not yet mature, to obtain or data on exotic options exchanges and decentralized exchanges is difficult As product 1% 6% 4% ：

24% In the futures and options market exchanges segmentation, accounted the for top 93% three and 88% respectively. of the Compared trading with volume, last stable. was relatively obvious, and the market structure year, the changes were not 48.98% of the futures market segmentation, nearly half market segmentation, futures 48.98% of the Deribit's dominance in the options market remained untouched this quarter, with its options turnover accounting for $86.7 billion. market, reaching 65.1% of the total In terms of futures contracts, exchange with a trading volume quarter. Its total exceeding turnover reached one $1.016 trillion, trillion accounting for in this 1 only include traditional options exchanges. the trading volume statistics in this report and the trading volume is concentrated in a few professional exchanges a few professional in is concentrated volume trading and the Exchanges Overall Situation Situation Overall Exchanges powers", and many "one superpower maintains market options and The futures CME OKEx

Others Bit.com

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 14 Source: TokenInsight Source: Huobi Binance FTX BitMEX Bit.com Bitwell CME LedgerX Bakkt Representatives Deribit OKEx 2 3 4 4 Amount With institutions in the other licenses issued by CFTC and other official DCO/DCM and or options trading. crypto asset futures United States, it can conduct compliant Standard than June 2020; launched no later business is officially trading The futures/options market (the quarterly trading or options advantage in any futures Have a comparative of options is $100 billion or the trading volume than is greater volume of futures than $10 billion); greater options; European/American mainly traditional are The option products over multiple periods. or options products futures rich Provide are trading volume is in the middle of the market (futures Quarterly futures/options between $0.1-1 billion); are between $10-50 billion or options options trading is not the main business of the exchange. and Futures no earlier than June 2020. launched trading business is officially The futures/options

Compliance exchange Emerging futures/options exchange futures/options Emerging Medium futures/options exchange Medium futures/options Large futures/options exchange futures/options Large Category Exchanges Category Exchanges

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 15 In Q1, Source: gvol.io, TokenInsight Source: In 2021 Q1, overall OKEx exchange volume, while in Binance, Huobi futures trading and volume accounted for 19.4% and 3.21% of all, business focus. gradually moving away from the OKEx alsocompetitiveness in the options market in Q1. strengthenedthe overall trading volume of the options business on OKEx increased to 1.5%, higher than 0.37%, itslast year’s layoutand its market and share Deribit’s was also comparative close to affected. been substantively segmentation has already advantage a quarter. in this From the perspective of premium, the vast marketmajority of large-value options transactions this quarter are concentrated still on advantage in Deribit, institutional strong. investor and groups its remains comparative Both Huobi and Binance perpetual chose contract to market, focus while on OKEx focus the chose on to the futures contract market. futures trading volume accounted for 46.56% of the 9.55% 3/31 34.487% OKEx Huobi Binance Deribit 3/17 35.07% 55.97% 3/2 Binance 3.21% 61.72% 0.002% 19.40% 21.64% 0.023% 2/15 Huobi 1/31 58.93% 23.88% OKEx 1/16 1.491% 46.56% 28.07% 2021Q1 Large Futures Exchanges Daily Trading Volume Changes and Products Proportion Changes and Products Volume Daily Trading Exchanges Futures 2021Q1 Large 1/1

Perpetual Contract Perpetual Spots Contract Futures Options Contract

$10B $30B $20B $50B $60B $40B creating comparative advantages comparative creating Large Futures/Options Exchange Exchange Futures/Options Large focus on exchanges futures/options large segmentation, In market

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 16 Source: gvol.io, TokenInsight Source: Bit.com is still focusing on the options market in Q1. In Q1's trading accounted volume, for a its further reaching options step 67.07%, compared trading to occupying last options market, while perpetual contract trading the volume volume year, third place has shrunk to in less than the one-third. In has also begun to set foot in addition, the delivery futures market, Bit.com delivery contracts. and next-quarter launching current In terms of non-mainstream crypto asset options, Bitwell can already guarantee that BCH LTC, XRP, and TRX can keep the liquidity current of and next week, delivery while LINK, options UNI guarantee and the liquidity between DOT of delivery can options between the the day and next day. The options exchange products also launched such new began as “Bull/Bear to Contract" expand contracts and the spot market. and its business lines to perpetual There are exchanges only in 2021 Q1, Bit.com two and Bitwell. threshold As emerging the of the futures/options new no exchanges more are to there carry increasing, options and futures businesses for the time being. out related markets is 3/31 3/17 3/2 2/15 1/31 67.07% 0.72% 1/16 2021Q1 Bit.com Daily Trading Volume Changes and Each Product Proportion Changes and Each Product Volume Daily Trading 2021Q1 Bit.com 32.22% Options Futures Perpetual 1/1

$33M

$67M $133M $167M $100M $200M try to operate more new business lines business new more operate try to Emerging Futures/Options Exchange Exchange Futures/Options Emerging to begin in Q1, and options focus on still exchanges futures/options Emerging

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 17 Source: gvol.io, TokenInsight Source: CME also launched In this quarter, the trading In this quarter, the trading scale of futures contracts the is trading scale of futures In Q1, compliance volume reached $167.1 billion, Compared with exchanges play a more important optionsrole in the futures contract contractmarket. market, compliance Kraken have undertaken the needs. main compliance futures trading accounting for 8.05% of the total volume. for trading in February. futures Ethereum In addition to choose to CME, focus more on perpetual contract market, using contract its exchanges license such advantages as to Kraken obtain contract compliance greater transactions, while profits the futures in business has become insignificant: perpetual contracts in Kraken. only about 12% of that of perpetual The share of compliance exchanges in the options market has to further last shrunk year. compared volume of options on compliance exchanges (CME, LedgerX) was only $1.728 billion, accounting for 1.3% of the total market share. The inherent shortcomings of compliance exchanges (which are subject to more regulatory restrictions and relatively conservative options categories) in options. development of compliance trading have caused certain obstacles to the As the main channels of institutional trading, CME, Bakkt, and • • • 3/31 Kraken 3/17 CME Bakkt 3/2 2/15 1/31 98.70% 1/16 Other Options Trading Volume Other Options Trading Volume Options Trading Compliance 2021Q1 Futures/Options Market Compliance Exchange Trading Volume Changes Volume Trading Market Compliance Exchange 2021Q1 Futures/Options 1.30% 1/1

$1B $3B $5B $2B $6B $4B Note: Bitwell data is temporarily missing market, but it is difficult to gain share in the options market the options in share to gain is difficult but it market, Compliance Exchange Exchange Compliance futures in the position important occupy an exchanges Compliance

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 18 Source: TokenInsight Source: 1.50% 1.47% 0.88% 0.88% 0.83% 2.19% 18.25% 5.97% 1.88% 66.15% ETH XRP EOS DOT Others BTC LTC BCH ETC BSV 2021Q1 Different Underlying Crypto Asset Futures Contract Product Trading Contract Product Asset Futures Underlying Crypto 2021Q1 Different addition, only BCH, XRP, EOS, ETC, DOT, BSV and other token-related futures volume at over $10 billion. contracts maintain quarterly trading Trading in DeFi futures contracts is weak, and the quarterly only $360 million. highest YFI contract is Possible reasons: the liquidity of non-mainstream crypto and assets professional investors, is who insufficient, are the mainstream of crypto assets. to non-mainstream also cautious about transactions related are futures contract users, The non-mainstream crypto asset contract product with trading the volume highest is quarterly LTC contracts, with a trading volume of $123.91 billion. In • • • Among them, Bitcoin's Among them, Bitcoin's Delivery in the Quarter in Other Date Contract Quarter Delivery in Next 25.54% 18.09% 56.37% 2021Q1 Contract Trading at Different Expiration Dates in Futures Market in Futures Expiration Dates at Different 2021Q1 Contract Trading

The speculative nature of futures is gradually weakening in the crypto asset of futures The speculative nature the mid-to-forward and hedge risks through market. Investors tend to hedge is taken over by perpetual while the speculative nature allocation of futures, contracts. current-season delivery contracts is $723.61 billion, accounting for more than one- billion, accounting for more delivery contracts is $723.61 current-season total market volume. of the third delivery contract in the next of $370.62 billion comes from The trading volume dates accounted for only 25.54%. and the other expiration quarter, The contract with the highest trading volume is the current-season futures futures the current-season the highest trading volume is The contract with $1.17 trillion, reaching delivery at the end of the quarter, contract due for turnover. of the total futures accounting for 56.37% trading volume of non-mainstream currency futures is generally less than $10 billion than $10 less is generally futures currency of non-mainstream volume trading Futures Product Overview Overview Product Futures the and allocation, futures in the current-quarter part the largest asset is Crypto • • •

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 19 Source: gvol.io, TokenInsight Source: $94.8M BCH Options Contract $14,098.7M ETH Options Contract $112,378.0M 2021Q1 Contract Trading at Different Expiration Dates in Futures Market Expiration Dates in Futures at Different Trading 2021Q1 Contract BTC Options Contract BTC $0M $72,000M $96,000M $24,000M $48,000M $120,000M

Note: BItwell data is temporarily missing, and some data are estimated based on existing data and macro market conditions estimated based on existing data and macro and some data are Note: BItwell data is temporarily missing, and non-mainstream crypto asset options further developed further options asset crypto and non-mainstream Options Product Overview Overview Product Options unchanged, basically remained products option of Bitcoin The proportion options are options mainly are used to hedge market fluctuations of crypto asset in the absolute mainstream status investment of Bitcoin options will portfolio. not change Therefore, in the short term. the current upgrade and the activity of Ethereum transactions, the proportion of Ethereum options products in options transactions may further increase. Since the option user groups are mostly professional investors, their crypto asset allocation is often based on Bitcoin, and Judging from the operation mainstream crypto of asset Q1, options certain the extent can compared liquidity to be last of year. Its guaranteed overall for improvement. is still room stable, but there relatively non- operation to is a With the gradual implementation of the Ethereum 2.0 network options products reached $112.38 billion, 88.8% it of Compared accounting with remained the last market year, turnover. for about the absolute mainstream; products was the $14.1 billion, accounting trading for share. 11.1% volume of the of market Ethereum In terms of crypto mainstream assets, the trading volume of Bitcoin

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 20 0 25 75 50 100 3/31 Source: Google Trend, TokenInsight Google Trend, Source: 3/17 3/2 2/15 1/31 ptions/Futures Contract Relevant Searching Popularity Trend Relevant Searching Contract ptions/Futures 1/16 2021Q1 O Bitcoin Options Bitcoin Futures Bitcoin 1/1 33 67 100 Related to the miners’ it is often difficult for ordinary users to

closely related to the change of perpetual closely contract related trading volume, indicating that distinguish between futures contract and perpetual contract. need to be strengthened. User education urgently short at the end of and February, the quarterly delivery day at the end of March, was close to 100, which is a quarterly peak. keywords the searching popularity The change for of futures contract searching popularity futures-relatedhas no close relationship with the change of futures trading volume, but is searching searching popularity of 43.93, 15.27 on average). "Bitcoin Options" is lower (only the searching popularity of Changes in the searching popularity of “Bitcoin more correlated with Futures” market fluctuations. are selling-off wave on about January 11, the organized institution peak at the end of March, which corresponds to the concentrated delivery day of options characteristics of at the the quarterly end obvious. allocation of of the options users quarter, are and the Compared with "Bitcoin Futures", which has an average The search for keyword "Bitcoin Options" reached a quarterly Options/Futures Searching Popularity Popularity Searching Options/Futures Futures" than "Bitcoin popular is much less Options" "Bitcoin The keyword

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 21 Source: Google Trend, TokenInsight Google Trend, Source: individual

some individual investors Reddit, AMC, GME, Robinhood, users may not only be satisfied with mainstream users may not only be satisfied with mainstream This seems to indicate that have begun to enter the options market: investors from communities such as Reddit have always been strong fans of crypto assets, and have a certain interest and little experience in and futures. investment tools such as options the application of The appearance of non-mainstream crypto assets such as in the searching keywords that indicates crypto asset options products, but have begun to try to find non-mainstream crypto for investment. products asset options In Q1 options contract related compared searching keywords, with last year, the keywords such searching as volume of Deribit has soared. Bitcoin Cash, and

Options/Futures Searching Popularity Popularity Searching Options/Futures in buzzwords to appear began elements related investor Individual

FIND, CREATE, AND SPREAD VALUE IN BLOCKCHAIN. 22 3/31 Source: gvol.io, TokenInsight Source: Although the 3/2 PUT ETH CALL 1/31 1/1 1 0 0.5 0.75 0.25 3/31 3/2 BTC PUT CALL 2021Q1 Options Trading Long-Short Ratio in Deribit Trading 2021Q1 Options 1/31 1/1 1 0 0.5 OKEx and Bit.com are still dominated by individual investors. fluctuation of the long-short ratio is still relatively to last year. significantly compared high, the range has dropped The occurrence of major market mood events and still investment behavior has of a individual investors. greater However, compared with impact last year, individual on investors participating the in options transactions have gradually become rational, and options market users are gradually becoming mature. 0.75 0.25 • • 3/31 3/2 PUT CALL OKEx 1/31 the number of users in Deribit 1/1 1 0 0.5 0.75 0.25 3/31 3/2 PUT CALL Bit.com 1/31 2021Q1 BTC Options Trading Long-Short Ratio in Bit.com and OKEx Long-Short 2021Q1 BTC Options Trading The general bullishness of options represents investors' long-term 1/1 1 0 0.5

0.75 0.25

an important reason for trading. the upswing of the long-short ratio of options optimism towards mainstream crypto assets. crypto mainstream optimism towards The volatility of the long-short volatility ratio is in still Deribit the lowest has among increased, keywords searching data, the it but can be options inferred that the exchanges. overall Combined with is the "steadily rising", and the entry of a large number of individual investors is On most trading days of Q1, the BTC and ETH call options trading in Deribit were relatively active and stable, and the ETH options had a more pronounced bullish trend. Note: Long-short ratio is calculated by premium individual investors are gradually becoming rational becoming gradually are investors individual Options User Features Features User Options and stable, relatively is groups user of options The distribution • •

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