“CDs” (Crypto Derivatives), The Next Trillion Dollar Wave?

3 min readMay 10, 2021


No doubts, if you’re a crypto junkie you’ve probably heard of CDs by now. And no, we’re not talking compact discs here, we mean the hottest trend in the DeFi space today — Crypto Derivatives.

Reports from CryptoCompare showed CDs trading volumes hit a whooping $2.9 trillion in January this year alone. That’s more than double the record it set in December last year. Bitmex, one of the largest CDs exchanges, recorded $1 trillion trade on its platform over the course of last year. If this isn’t a massive wave in the crypto world, there’s little to wonder what else it could be.

Now here comes the million dollar question — is this a temporary craze or the new wave for crypto trading?

Goldman Sachs recently opened trading with NDFs (non-deliverable forwards), a derivative tied to Bitcoin’s price. The bank had earlier in March relaunched its crypto trading desk with plans to support bitcoin futures trading. When the big-wigs come rolling in, you know there’s some juice here.

So what’s the fuss about CDs?

First things first, let’s get you outta the dark, what are crypto derivatives?

CDs are financial contracts or agreement between two or more parties based on the future price of an underlying crypto asset. In other words, parties agree on a contract speculating cryptocurrency prices at a specific date in the future. They are further required to trade at the agreed price on the date of contract execution. The trade takes place irrespective of the market price (risen or fallen) on the date of execution. Get the gist?

Now why are CDs such a big deal?

There’s been a massive growth in demand for CDs today, no doubts. Ever since Bitcoin futures (the most popular CD today) was launched, the trading volumes have hit the roof across various derivatives exchanges. This has sparked interest from mainstream investors as each looks for a way to hedge against risks.

It’s no news that cryptocurrencies are inherently volatile, what you need is something that protects you from losses resulting from this volatility. CDs are what gets the job done. Crypto derivatives help the trader reduce the risks of volatility. This is one main reason they have become the latest trend in the crypto space.

CDs give the trader opportunities to take advantage of future price movements of crypto assets and generate more profits. The growth in crypto derivatives trading has also provided more liquidity to decentralized exchanges, a major factor that has held the crypto space back from mainstream adoption.

Temporary craze or the new direction?

While some may believe the current boom is only a temporary bubble, the DeFi revolution may have only just begun. CDs have succeeded in attracting institutional investors which has added some level of legitimacy to the crypto market as a whole. This invariably signals the beginning of the mainstream adoption of crypto assets and maturity of the crypto space.

Although still in its nascent stage, crypto derivatives offer the best tools for risk mitigation and increased liquidity in DeFi. The current high demand for CDs and rise of different forms of derivatives and exchanges shows this certainly isn’t some temporary craze, it’s the new future. Strap in, and enjoy the ride because it’s gonna be a long one!

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