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What are cryptocurrency derivatives exchanges?



Not only are there cryptocurrency exchanges that allow cryptocurrency and token trading, but there are also cryptocurrency derivatives exchanges.

Cryptocurrency derivatives can often be found on the same traditional cryptocurrency exchanges, but not all.

Traditional cryptocurrency exchanges are those that allow users to deposit their funds, either in cryptocurrencies or fiat currencies, to use to buy or sell cryptocurrencies, and then possibly withdraw them.

In these cases, cryptocurrency tokens, such as BTC, ETH, etc., are deposited, traded, and withdrawn.

What to buy on cryptocurrency derivatives exchanges?

However, some bags also offer the possibility to buy and trade derivatives.

These are contracts that are generally issued by the exchange itself and can only be bought and traded within the platform.

The most classic case is called CFD, or Contract For Difference, which can only be used for trading.

In other words, its purpose is only to allow users to buy and sell.

In recent years, futures contractsboth fixed and perpetual have become very popular and, although they differ from CFD They only allow pure speculation.

In fact, only so-called spot exchanges, that is, those that allow the direct exchange of cryptocurrency tokens, also allow the withdrawal of tokens, for example, to proprietary wallets.

For example, buying Bitcoin (BTC) on a classic spot market allows the buyer to withdraw the purchased BTC and send it to their own external wallet. This way, the user becomes the true and sole owner of the acquired bitcoins and you can store them independently, safe from any issues the exchange might have.

However, cryptocurrency derivatives offer speculators special features that tokens do not have, allowing them to trade in a more advanced and structured way. Spot exchanges, on the other hand, are pretty simple.

There are not many cryptocurrency spot exchanges that also offer derivative products. These are generally advanced speculative instruments for more experienced investors, which is why many crypto exchanges that are not aimed at professional investors do not offer them.

However, it should be noted that crypto exchanges offering derivatives have been very successful, especially recently.


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