We’ve all heard stories of multi-billion dollar futures contract settlements that are the cause of 25% intraday price drops in the price of () and Ether (ETH), but the truth is that the industry has been plagued with 100x leverage instruments since BitMEX launched its perpetual futures contract in May 2016.
The derivatives industry goes well beyond these retail-driven instruments, as institutional clients, mutual funds, market makers, and professional traders can all benefit from using the instrument’s hedging capabilities.
In April 2020, Renaissance Technologies, a $ 130 billion hedge fund, was given the green light to invest in the markets using instruments listed on the CME. These trading giants are nothing like retail cryptocurrency traders, instead focusing on arbitrage and non-directional risk exposure.
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