- Bankman-Fried sees options as a less crowded space that offers considerable potential for innovation.
- FTX launched cash-settled Bitcoin options back in January.
FTX, a crypto derivatives exchange, will be focusing more on products like options and less on listing new futures, as per CEO Sam Bankman-Fried. The exchange offers trading for futures tied to more than 25 cryptocurrencies such as ETH, BTC, USDT and PAXG.
Earlier in January, FTX launched cash-settled Bitcoin options following the lead of companies like Bakkt and OKEx. FTX CEO had then tweeted that the options hit $1 million in volume within the first couple of hours of launch and traded about 2,000 contracts within 12 hours. According to an earlier report by The Block, Binance spent “tens of millions” last month to acquire an equity stake in FTX.
Bankman-Fried revealed that a lack of liquidity has discouraged him from listing more futures in the exchange. Plus, they have already listed the more popular ones:
We’re constantly getting requests to list more futures…but we slowed that down a lot. Part of the reason is that there’s an infinite list of coins. We’ve already listed all the top ones, and for other coins that we list futures one, there’s a question of if there’s actually a lot of demand to trade those futures.
He also noted that adding products that aren’t enough liquid can hurt user confidence in the exchange.
If you don’t have an extremely liquid market, a lot of users will feel pretty unhappy about that. From that perspective, we’re pretty nervous about doing things that increase the odds of there being no liquidity in a market for a while.
According to Bankman-Fried, the options market has significant potential given that it is a less crowded space.
I do think that to a decent extent futures are way higher in volume now, and I’m not expecting options to overtake that anytime soon, which is why we launched futures first, and it took us nine months or so to head into options. But there are way fewer serious competitors in the options space…And I think there’s a lot of innovation left to be done on options.
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