Singapore-based crypto futures exchange Bybit has announced the addition of Tether (USDT) perpetual contracts. By adding the stablecoin to its existing futures contracts (BTC, ETH, EOS and XRP paired with USD), the exchange aims to furnish traders with greater simplicity and flexibility, as they can now hold long and short positions simultaneously to better hedge their positions.
As per Bybit’s announcement, USDT can be used as the quote and settlement currency, facilitating two-way trades and granting traders exposure to underlying spot market prices for assets such as bitcoin – with the option to apply high leverage if desired.
Bybit Riding the Crest of a Wave
The expansion of its crypto-backed derivatives range comes at a good time for Bybit, which has seen trade volume steadily increase in recent months. Despite the coronavirus-inspired market turmoil, the exchange – headquartered in Singapore but with offices in Taiwan and Hong Kong – consistently enjoys an average daily volume of $1 billion, making it a key player in the derivatives market alongside the likes of BitMEX, Huobi, bitFlyer, Binance, CoinFlex, FTX, OKEx and Deribit.
With USDT perpetual contracts, Bybit intends to imitate the underlying spot markets but with increased leverage (up to 100x). The new perpetual contracts will have no expiry date and the price will be tethered, as it were, to the underlying index to ensure the preservation of price accuracy.
In addition to adding Tether, the exchange has made several refinements to its trading engine, making it simpler for traders to enter and exit positions during spells of extreme volatility. Other trader-friendly features have also been rolled out, including a Take-Profit/Stop-Loss (TP/SL) setting which lets traders directly set TP/SL limits when they place orders. Margin requirements are being reduced too, in a shot across the bows of rival exchanges. Last month, Binance launched a Zcash-Tether perpetual contract with maximum leverage of 50x.
Offsetting Liquidation Risk
Perhaps of most relevance given the recent BitMEX crash was Bybit’s announcement that traders launching multiple futures contracts will have the chance to participate in a shared insurance fund, thereby helping to offset the risk of liquidation. Bybit rival BitMEX experienced a high volume of liquidations on March 13, with a subsequent outage leading to widespread accusations that it had flipped the kill switch on its trading services – accusations it strenuously denied. Nonetheless, Bybit is among the platforms likely to profit from BitMEX’s PR woes.
The dollar-pegged Tether has experienced renewed interest of late, as investors liquidate risk-on assets and flock to safe havens. The world’s biggest stablecoin now boasts a market cap exceeding $5.7 billion, with the Tether Treasury recently minting 180 million USDT in the space of three days, citing an “inventory refresh.”
Bybit’s launch of Tether (USDT) perpetual contracts is sure to be welcomed by traders enamored with perpetual options contracts. Their trading savvy is sure to be tested in the choppy waters ahead.