We have seen monumental changes in the crypto space throughout 2021. From China banning crypto all together to the rise of more altcoins, we have seen increased volatility in the markets as a result. But what does the 2022 landscape look like for the crypto industry?
Marcus Fetherston, Head of Operations at award-winning crypto derivatives provider, Eightcap, chats to us about the rapidly increasing demand for crypto derivatives and the key trends retail traders will want to benefit from in the coming year.
Q. Can you tell us more about who Eightcap are?
Eightcap is a CFD and FX provider, and we have recently been named Best Crypto Broker of the year at the AtoZ Market annual awards. We were founded in Melbourne, Australia, back in 2009, and since then, we have grown and offered our derivative products to clients worldwide. Currently, we offer access to over 600 financial instruments, including FX, Indices, Shares, Commodities, and Cryptocurrency CFDs.
Our main mission is to build a home for MT4 and MT5 traders, and we do this via our extensive product offering, personalized customer support, and free educational resources.
Q. What made Eightcap launch its extensive range of crypto derivatives?
The crypto derivatives sector is booming and will continue to thrive this coming year. We’ve found that trading volumes for derivatives in the crypto market exceed spot markets. Due to this increased demand, we wanted to be one of the only derivatives providers in the space with an extensive range of cryptos to offer.
At the moment, you can find a regulated derivatives broker with a reasonable crypto offering, but say you want to go long or short on a range of different altcoins; this is where you may struggle. We found that the licensed derivatives providers don’t have a varied product range.
So, with this in mind, who will cater to the derivative traders that want to open positions on altcoins such as Shiba Inu, Pancake Swap, DODO, or even Sushiswap? That’s one reason why we launched over 250 crypto derivatives.
We wanted to make sure that there was something to trade for every individual crypto trader, whether the more popular cryptos such as Bitcoin or Ethereum or the emerging altcoins.
The other reason we have rolled out a comprehensive crypto derivative offering is the lack of licensed brokers that offer crypto derivatives. Many providers in the space showcase many crypto derivatives, but unfortunately, there is a considerable risk associated with trading derivatives with such providers.
The reason is that they are not regulated, and this means traders won’t have peace of mind when trading derivatives. Therefore, we are offering a solution to both pain points in the crypto market. We not only have rolled out over 250 crypto derivatives with ultra-low spreads but we are regulated in multiple jurisdictions.
Q. What do you think the future holds for crypto derivatives?
One thing is for sure, looking back over the past year, the crypto derivatives market has undoubtedly experienced significant bouts of volatility. This makes the market more attractive for retail traders who want to try and profit from the price fluctuations.
With changes to regulations in the coming year, and when crypto becomes widely accepted (which I believe it will), this volatility will continue. As a result, crypto derivatives will become even more popular. I think investors worldwide will be watching for updates on the Ethereum blockchain, and again this will have a noticeable impact on the markets.
We are already seeing parallels between crypto trading and more traditional assets such as FX trading, for example, patterns in price and liquidity levels. The way crypto derivatives trading is approached will also change.
We are already seeing the negative stigma that was once there around the crypto sector diminish. Now, governments worldwide are starting to see the benefits of the technology behind cryptocurrency. We are also beginning to recognise crypto as a legal tender in some parts of the world. This is just the start for crypto derivatives.
Q. On that note, do you think regulation in the crypto market will also change?
I do think it will. The way we view crypto is rapidly changing. It’s a matter of reevaluating and creating a comprehensive regulatory framework that will tick most of the boxes. If we look to the U.S., there’s a crypto bill in the works.
This bill looks at everything from how the industry is taxed to how crypto consumers are protected from losses and scams. A pro-Bitcoin senator has proposed the bill. When political figures understand how necessary Bitcoin can be as a store of value, regulatory changes are more than likely to occur. It will be interesting to see how this situation unfolds in the coming year.
Q. What are your thoughts on DeFI?
Last year, Ethereum dominated the decentralised finance space. However, questions are amounting around if this is set to continue in the future. We are starting to see a slump in the market, and the finger points to what we call the Ethereum killers.
Towards the latter part of 2021, rivals have emerged, and the total value of other independent blockchain networks have skyrocketed. Investors are turning to other blockchain networks such as Cardano or Solana due to the high gas fees that they experience on the ETH network. Regardless, the rise of decentralised finance has been massive, and it will continue no matter which blockchain is used.
Q. What is Eightcap’s game plan for 2022?
We have many projects coming up, we are keeping them under wraps for now, so I can’t say much about that. However, our main priority is to ensure that we are evolving to keep up with the needs of crypto derivatives traders.