Tether Becomes Second Crypto to Launch on Blockchain Futures Platform.
The cryptocurrency industry keeps tapping more crypto market as the volume of Bitcoin (BTC) derivatives trading continues to rise, so like stablecoin Tether (USDT), for futures trading.
KuMEX, a derivatives arm of IDG-backed crypto exchange, KuCoin, is planning to roll out USDT-margined Bitcoin perpetual contracts on March 30, 2020, the firm officially announced on March 27.
KuMEX currently supports only USDT and Bitcoin.
The company said, KuMEX users are already able to deposit USDT via the web or public API starting from March 26, while the new type of futures contract will be launched next week. According to the announcement, KuMEX offers crypto derivatives trading up to 100x leverage.
Tether will become the second cryptocurrency supported on KuMEX after Bitcoin, as KuCoin told Cointelegraph. The firm also plans to support other major cryptocurrencies like Ether (ETH), XRP, Bitcoin Cash (BCH) and Bitcoin SV (BSV) for trading on KuMEX, in the near future.
Let’s see what are perpetual contracts in crypto?
By definition, a perpetual contract is a special type of a futures contract — an agreement to buy or sell a crypto asset on a specific future date at a specific price. A perpetual contract does not have an expiry date while its trading is based on an underlying index price, unlike the traditional form of futures. The index price includes the average price of an asset in line with their relative trading volume and major spot markets.
As such, KuMEX’s BTC/USDT spot index will consist of the volume-weighted average price of BTC/USDT across six major cryptocurrency exchanges, including Binance, OKEx, and Huobi. KuCoin added, that trading volume will be adjusted on a quarterly basis.
Average daily trading volume on KuMEX hits about $100 million
The newly appointed CEO at KuCoin Global, Johnny Lyu, outlined that the USDT perpetual contracts will be “clearer and easier for new futures traders to make investment decisions using USDT.” He states that the contracts will also mitigate the volatility brought by non-pegged tokens.
Additionally, the KuCoin team emphasized to Cointelegraph that KuMEX decided to choose USDT as the first stablecoin supported on the platform because the coin is “far more stable” than other coins like Circle’s USDC or Paxos’ PAX in terms of market capitalization, liquidity and user recognition.
