Published on oktober 9, 2024, 12:34 am
Image source: Fox News
```json [ "TLDR: Crypto.com's Nadex introduces derivatives contracts linked to memecoins like PEPE and FLOKI, expanding offerings to include ELON and BONK. These 'touch bracket' contracts are hedging mechanisms with increasing popularity in volatile cryptocurrency markets. Regulatory trend sees US exchanges like CME and SEC approving crypto derivatives products, supporting expansion of regulated offerings. Nadex reports high trading volumes in 2023 for BTC, ETH, LTC, prompting further development to meet rising demand for diversified and regulated crypto products." ] ```
Traders can now hedge exposure to memecoins including PEPE and FLOKI as Crypto.com’s North American derivatives exchange, Nadex, has introduced derivatives contracts tied to these tokens. Recently listed with the United States Commodity Futures Trading Commission (CFTC), Nadex has expanded its offerings to include products linked to Dogelon Mars (ELON) and BONK.
The addition of these memecoins has significantly contributed to Nadex’s cryptocurrency derivatives suite, complementing existing contracts related to popular tokens like Bitcoin (BTC) and Ether (ETH). The market capitalization of the four memecoins covered by Nadex’s contracts amounts to nearly $7 billion based on data from CoinMarketCap.
Nadex’s latest offering includes “touch bracket” contracts, which serve as hedging mechanisms that trigger payouts if a token’s spot price touches predetermined levels before the contract expires. These instruments are gaining traction in volatile markets like cryptocurrencies due to their structure that minimizes the risk of contract manipulation, as stated in the filing submitted by Nadex.
The introduction of crypto derivatives on regulated US exchanges is a growing trend, with established platforms like the Chicago Mercantile Exchange (CME) venturing into this space. Notably, the US Securities and Exchange Commission (SEC) recently greenlit options linked to BlackRock’s BTC exchange-traded fund (ETF), iShares Bitcoin Trust (IBIT), for potential listing on Nasdaq pending approvals from other regulatory bodies such as the CFTC.
Nadex reported substantial trading volumes in 2023 with over 28 million contracts traded for BTC, ETH, and Litecoin (LTC). This positive response from traders has motivated Nadex to expand its cryptocurrency commodity derivative offerings further to cater to the increasing demand for diversified and regulated products within the market.
Derivatives exchanges like Nadex typically self-certify their products for compliance with existing regulations without requiring explicit regulatory approval before launching new contracts. In a similar vein of expansion in the sector, Kalshi, another derivatives exchange prevailed in court against CFTC and subsequently listed event contracts for betting on US election outcomes, followed by adding political event contracts involving New York City mayor Eric Adams in recent developments.
As crypto derivatives gain traction among traders seeking exposure management tools in digital assets, initiatives like those undertaken by Nadex and other exchanges are reflecting a shift towards broader adoption of cryptocurrency-related financial instruments within regulated frameworks.
Original article posted by Fox News
