Meltem Demirors: Derivatives Dominate Trading

The chief strategist of CoinShares investment company Meltem Demirors believes that the booming derivatives market will prevent the growth of Bitcoin after a next halving. She wrote about this on her Twitter. “For the first time, there is a robust derivatives (futures, options) market for Bitcoin. most firms looking to speculate on Bitcoin will trade a derivative, not the underlying.” She calls Bitcoin “a digital commodity” and due to the development of the derivatives market, manufacturers can no longer control pricing. Demirors drew an analogy with oil, where production volumes are inversely related to futures trading activity. “Derivatives markets are a strange animal. let’s take oil. this chart from shows what’s happened to oil markets over the last 20 years. Derivatives dominate trading. most firms trade paper contracts to speculate on the price of oil. the market is driven by speculation.” She believes that at the moment, the cryptocurrency derivatives market is developing at a very fast pace: the BitMEX exchange was the pioneer, then a giant SME introduced the derivatives, and now hundreds of new players come to this market segment. Meltem Demirors also added that Bitcoin is increasingly correlated with global financial markets every day. Recall earlier we wrote about the forecast of Anthony Pompliano, who believes that one Bitcoin will cost 100 thousand dollars at the end of 2021, and rapid growth will follow halving.