Crypto Exchange BIT Unveils Options Market for Cardano's ADA Token
BIT's unified margin system allows ADA holders to trade options at a discount.
Cryptocurrency derivatives exchange BIT on Wednesday rolled out options tied to Cardano's ADA token while promising to add more alternative cryptocurrencies (altcoins) in coming months.
The ADA options are live in the platform today and are denominated and settled in U.S. dollars, BIT said in a press release shared with CoinDesk. One ADA options contract represents 1 ADA, the exchange's spokesperson said.
ADA, the native token of Ethereum competitor Cardano, has a market value of $9.73 billion and is the world's eighth-largest cryptocurrency at press time. Alternative cryptocurrencies tend to be more volatile than the market leaders, bitcoin (BTC) and ether (ETH).
Options are derivative contracts that give the purchaser the right to buy or sell an underlying asset at a certain price on or before a specific date. A call option gives the right to buy the asset, while a put option gives the right to sell.
The availability of ADA options means traders can now use the options to hedge their portfolio risks or bet on a volatility explosion, as they with bitcoin and ether options.
With BIT's unified margin system, traders can use their coin holding as collateral to trade ADA options at a discount.
"BIT's unified margin system allows users to utilize all assets in their accounts as trading collateral with a haircut ratio. ADA's haircut ratio is now 15%, meaning users can use their ADA as collateral and trade options at a 15% discount," BIT said in the release.
The offering, launched in collaboration with strategic partner Darley Technologies and market maker DWF Labs, expands BIT's existing suite of options, which include those tied to the decentralized layer 1 blockchain, The Open Network's TON coin and bitcoin and ether futures and options.
BIT said it plans to offer options to other altcoins, including meme coins, in the future.
The global crypto options market, led by Panama-based Deribit exchange, is already worth billions of dollars, with most of the activity concentrated in bitcoin and ether contracts, and is known to influence the spo t prices of the top cryptocurrencies.
Edited by Sheldon Reback.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
FHE is live! Bullish or bearish? Join to share 24,000 FHE!
BABY is live! Bullish or bearish? Join to share 24,000 BABY!
VIPBitget VIP Weekly Research Insights
The unique value of Proof-of-Work (PoW) tokens lies in their mining mechanism and regulatory positioning. Research shows that mining costs are a defining feature of PoW tokens, involving significant investment in hardware and electricity. When market prices approach miners' breakeven points, miners tend to hold onto their coins in anticipation of future appreciation. This behavior reduces circulating supply, shifts the supply-demand balance, and may contribute to price increases. Regulatory clarity is also critical to the investment appeal of PoW tokens. Both BTC and LTC are classified as commodities by the U.S. SEC rather than securities, which simplifies the ETF approval process. In January 2024, the approval of the BTC spot ETF triggered significant institutional inflows. LTC is currently undergoing the ETF application process. While DOGE and KAS have not yet received formal classification, their PoW nature may position them for similar treatment. Together, these factors enhance market liquidity and attract more institutional investors.
Trending news
MoreCrypto prices
More
