derivatives

Gemini to launch derivatives platform outside the United States

The platform’s first derivatives contract will be a BTC perpetual contract denominated in Gemini Dollar, followed by an ETH/GUSD perpetual contract.

United States-based crypto exchange Gemini announced on April 21 the upcoming launch of a derivatives platform outside the United States. The move comes amid a tightening, uncertain regulatory environment for crypto firms in the country. 

Dubbed Gemini Foundation, the offshore division will offer services to users based in Singapore, Hong Kong, India, Argentina, Bahamas, Bermuda, the British Virgin Islands, Bhutan, Brazil, the Cayman Islands, Chile, Egypt, El Salvador, Guernsey, Israel, Jersey, New Zealand, Nigeria, Panama, Peru, the Philippines, Saint Lucia, Saint Vincent and Grenadine, South Africa, South Korea, Switzerland, Thailand, Turkey, Uruguay and Vietnam. It will not offer services for customers in the United States.

The platform’s first derivatives contract will be a Bitcoin (BTC) perpetual contract denominated in Gemini Dollar (GUSD), followed by an ETH/GUSD perpetual contract shortly after.

Eligible customers will be able to trade both spot and derivatives products, as well as convert U.S. dollars and USD Coin (USDC) into GUSD on a 1:1 basis. Fees, profits and losses will also be processed in GUSD. The default leverage is 20x, with the maximum possible leverage being 100x.

Unlike traditional futures contracts, perpetual contracts never expire. Perpetual futures trading is not regulated by the Commodity Futures Trading Commission, and exchanges offering crypto futures contracts, like BitMEX, are not available for U.S. customers.

Related: What are perpetual futures contracts in cryptocurrency?

The move comes a few days after Gemini revealed plans to establish a new engineering hub in India. The exchange’s founders, Tyler and Cameron Winklevoss, recently announced that Gemini has “big plans for international growth this year in APAC.” Earlier this month, Gemini filed a pre-registration with the Ontario Securities Commission to become a restricted dealer in Canada.

Gemini has been scrutinized by U.S. authorities, with the New York State Department of Financial Services reportedly investigating the exchange over claims that many users had believed assets in their Earn accounts were protected by the Federal Deposit Insurance Corporation.

Gemini’s Earn program halted withdrawals in November after its operating partner, Genesis, cited “unprecedented market turmoil.” In January, the firm filed for Chapter 11 bankruptcy. Reports at the time suggested that up to $900 million in Earn user funds could have been locked. The U.S. Securities and Exchange Commission also charged the exchange with offering unregistered securities through Earn in January.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

CFTC chair says Binance intentionally broke rules concerning futures, commodities

The head of the CFTC, Rostin Behnam, recently spoke out against Binance and its leadership at a public-facing event held at Princeton University.

Rostin Behnam, Chairman of the Commodity Futures Trading Commission (CFTC), recently spoke out about the allegations levied against Binance, claiming that the beleaguered cryptocurrency exchange’s leadership knowingly operated outside of U.S. laws governing the exchange of commodities and futures. 

Speaking at a fireside chat that took place at the DeCenter Spring Conference at Princeton University on April 14, Bloomberg reports that Behnam told those in attendance that Binance leaders had intentionally flouted the rules concerning operations, including knowingly allowing U.S. citizens to participate on the exchange through the use of virtual private networks (VPNs) and other obfuscation tools.

“These are not unsophisticated individuals,” Behnam said at the event. “They are starting large companies and offering futures contracts and derivatives to U.S. customers.” The CFTC head later added “If you are going to offer futures contracts in the U.S., there is a clear understanding that you are registered with the CFTC and comply by the law.”

The comments stem from the CFTC’s lawsuit against Binance and its CEO Changpeng “CZ” Zhao for alleged trading violations. Per a report from Cointelegraph, “The CFTC is pressing seven counts for executing unregistered futures transactions, providing illegal commodities options, failure to register as a Futures Commission Merchant, Designated Contract Market or Swap Execution Facility, failure to supervise diligently or implement AML/KYC measures and law evasion.”

Related: Binance CEO CZ: Regulators need deep understanding of crypto for proper rules

The nuts and bolts of the CFTC’s suit against Binance — the exchange also faces legal action from the IRS and federal prosecutors — relies on supposed evidence that Binance and CZ continued onboarding U.S. customers despite a policy prohibiting such actions and that the company knowingly engaged in illegal futures trading, allegedly running the business afoul of U.S. anti-money-laundering laws.

It’s unclear at this time why the CFTC head would participate in what appears to be flippant public discussion of ongoing investigations. Binance, for its part, continues to assert its participation in good-faith efforts at global compliance.

Ethereum price metrics hint that ETH might not sell-off after the Shapella hard fork

ETH traders are exercising caution ahead of the April 12 Shapella hard fork, but the signal to watch is staking unlock requests.

Ether (ETH) price has increased by 58% year to date, but it has far underperformed the market leader Bitcoin (BTC). In fact, the ETH/BTC price ratio has dropped to 0.063, its lowest level in nine months. 

Analysts believe that the majority of the movement can be attributed to the Ethereum network’s upcoming Shapella hard fork, which is scheduled for April 12 at 10:27 p.m. UTC.

Ether / Bitcoin price ratio at Binance. Source: TradingView

The Ethereum network upgrade will allow stakers to unlock their Ether rewards or stop staking entirely. By April 11, over 170,000 ETH withdrawals were requested, according to the analytics firm Glassnode. However, the total staked on the Beacon Chain exceeds 18.1 million ETH, which has traders fearful until more information on ETH’s potential selling pressure becomes available.

Is the price impact of the Shapella fork already priced in?

The staking unlock was widely known and expected, so traders could have anticipated the movement. Some analysts have gone so far as to call the hard fork a “buy the news” event.

Using a meme, trader CanteringClark is likely expressing dissatisfaction with the theory, but to invalidate the hypothesis, one must investigate potential reasons for ETH’s underperformance other than the much anticipated hard fork.

For starters, the Ethereum network’s average transaction fee has been above $5 for the past five weeks, and the Shapella fork does not address the issue, despite minor improvements. This alone lowers the chances of a bullish breakout following the upgrade, as most decentralized applications (DApps) and projects will continue to prefer second-layer and competing networks.

Furthermore, volume at Ethereum-based decentralized exchanges (DEX) has fallen by 84% since a weekly peak of $38.2 billion on March 5. The most recent data for the week ending April 2 was $6.4 billion, according to DefiLlama. In the same period, competing blockchains saw 60% lower volumes on average, a sign that Ethereum lost market share.

According to Paul Brody, EY’s global blockchain leader, one reason for Ether’s price underperformance relative to Bitcoin could be “the battle to keep Ethereum sufficiently and properly decentralized.” Brody cites exchanges as highly centralized custodial validators, as well as some semi-centralized players and staking pool operations that invest funds from tens of thousands of individual crypto wallets.

Ether derivatives display balanced bets between bulls and bears

Let’s examine Ether derivatives metrics to determine the current market position of professional traders. For example, the open interest in Ether options for the weekly expiry on April 14 is $510 million, with neutral-to-bullish call instruments outnumbering protective put options by 36%.

Those ETH options bulls could come up empty-handed because 60% of their bets were placed at $2,000 or higher. As a result, if Ether’s price remains between $1,800 and $1,900 on April 14 at 8:00 am UTC, the outcome is balanced between call and put options. Furthermore, an expiry price between $1,900 and $2,000 represents a mere $100 million advantage for bulls, which is unlikely to justify the cost of a price pump.

Futures markets should also be examined to determine whether the Shapella hard fork has caused investors to become more risk-averse. Ether quarterly futures are popular among whales and arbitrage desks, and they typically trade at a slight premium to spot markets, indicating that sellers are requesting more money to postpone settlement.

As a result, futures contracts in healthy markets should trade at a 5% to 10% annualized premium — a situation known as contango, which is not unique to crypto markets.

Ether 3-month futures annualized premium. Source: Laevitas

The premium on Ether futures is currently 2%, down from 4% the previous week. Despite being below the 5% neutral threshold, it shows no excessive short demand.

Related: Validator service to use API for ETH staking process

Traders should monitor staking unlock requests

Based on Ether derivatives, there is no reason to believe professional traders expect a significant price correction as a result of the staking unlock. Nonetheless, given the high transaction fees and declining DEX activity, the chances of a “buy the news” event are slim.

Professional traders would have used derivatives instruments to bet against Ether’s price because the event was widely publicized, which hasn’t happened given the ETH futures’ premium. There are no obvious reasons for a rally, but derivatives traders do not anticipate any panic selling. So, unless the number of staking unlock requests significantly increases, Ether should remain near $1,900 for the foreseeable future.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitget launches $100M Web3 fund for crypto projects in Asia

Bitget’s new fund will receive $100 million as an initial investment to support the next generation of Web3 projects.

Crypto derivatives exchange Bitget launched a new fund focused on supporting the next generation of Web3 projects. According to a statement seen by Cointelegraph, $100 million will be invested in the fund as an initial investment. 

Bitget says it will target funding Web3-friendly venture firms and projects worldwide. It will focus on Asian projects from experienced teams with clear roadmaps that are working on real-world problems.

“We can see that Web3 space is evolving rapidly and many projects deserve the support to further advance such development and make Web3 a truly global phenomenon, as Web2 had once become. That is why the Bitget Web3 Fund will strive to seek out projects that have the most impact on this process,” said Gracy Chen, managing director of Bitget.

Related: China to upgrade national blockchain standards by 2025

According to the exchange, potential partners in the initiative include several venture capitalists such as Foresight Ventures, ABCDE Capital, SevenX Ventures and DAO Maker, as well as Dragonfly Capital — which recently announced a $10 million investment on Bitget to support its ongoing global expansion.

Bitget revealed that since launching in 2018, it has attracted over 80,000 traders and 380,000 copy traders. The exchange plans to expand spot trading, the launchpad and Bitget Earn products in 2023. Bitget recently acquired the BitKeep wallet — a Web3 access gateway with over 9.5 million users — for $30 million.

During last year’s bear market, the exchange also launched a $200 million fund to safeguard users’ assets and restore investors’ confidence. Bitget pledged to secure the fund’s value for three years. In addition, the exchange claims to have implemented strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies last year to keep bad actors out of its services. 

Magazine: Hodler’s Digest, April 2-8: BTC white paper hidden on macOS, Binance loses AUS license and DOGE news

Binance Australia Derivatives license canceled by securities regulator

In February, Binance Australia Derivatives abruptly closed certain derivatives positions and accounts, citing investor classification compliance.

The Australian Securities and Investments Commission (ASIC) has canceled the license of Binance Australia Derivatives after a targeted review of Binance’s operations in the country.

“ASIC has today canceled the Australian financial services license held by Oztures Trading Pty Ltd trading as Binance Australia Derivatives,” the securities regulator stated in the official announcement on April 6.

Following the license cancellation, Binance Australia Derivatives clients will not be able to increase derivatives positions or open new positions with the platform from April 14. The company will also require users to close any existing derivatives positions before April 21, as Binance is expected to close any remaining open positions on that day.

“The terms of the cancellation include a provision that the cancellation has no effect on the requirement for Binance to continue as a member of the Australian Financial Complaints Authority until the end of April 8, 2024,” the statement said.

The Australian securities regulator went on to say that it has been conducting a targeted review of Binance’s financial services business in Australia, including its classification of retail and wholesale clients. According to ASIC chair Joe Longo, the review was related to compliance with the classification of retail and wholesale clients. The official said:

“Retail clients trading in crypto derivatives are afforded important rights and consumer protections under financial services laws in Australia, including access to external dispute resolution through the Australian Financial Complaints Authority.”

In the statement, ASIC mentioned that the global Binance exchange and its CEO, Changpeng “CZ” Zhao, are currently facing a lawsuit from the United States Commodity Futures Trading Commission. The regulator also noted that various Binance group entities had been subject to other regulatory warnings and action worldwide, referring to a series of warnings and investigations initiated by global regulators against Binance in 2021.

Related: Australian ‘Big Four’ bank ANZ halts cash withdrawals from many branches

Following its recent engagement with ASIC, Binance has chosen to pursue a “more focused approach” in Australia by closing down Binance Australia Derivatives, a spokesperson for Binance told Cointelegraph. The representative emphasized that spot trading on Binance will still be available for Australian residents, stating:

“Australians can continue to enjoy the use of our spot exchange product. There are a small number of remaining users on Binance Australia Derivatives, approximately 100, and we have reached out to notify them of the winding down process.”

The news comes after Binance Australia Derivatives sent abrupt notifications to its users in late February, saying it was starting to close certain derivatives positions and accounts. The firm cited investor classification compliance, reportedly claiming that it was restricting users that didn’t meet the requirements to be wholesale investors. Local regulators subsequently launched an investigation, aiming to conduct a “targeted review” of Binance’s local derivatives operations.

Magazine: Asia Express: US and China try to crush Binance, SBF’s $40M bribe claim

More than just an airdrop? Arbitrum builds a resilient DeFi fortress with unique primitives

Arbitrum is making moves to become the hub of decentralized derivatives trading and DeFi activity within the layer-2 space.

The total value locked (TVL) in decentralized finance applications on Arbitrum, the layer-2 Ethereum network blockchain, has doubled since the start of 2023.

While investors’ hope of an ARBI token airdrop is a major factor attracting activity to the Ethereum scaling network, the ecosystem’s DeFi growth is also showing robust growth. 

Arbitrum has become a major hub for decentralized derivatives trading and offers high yields for crypto yield hunters, reminiscent of wild west DeFi days of 2020.

GMX and Gains Network takeover decentralized derivatives trading

GMX is the leading DApp on Aribitrum, comprising 25% of the network’s total TVL. The perpetual swap trading platform pits traders and liquidity providers against one another. The liquidity providers own GLP tokens, an index of cryptocurrencies and stablecoins that act as trader counterparties. Meanwhile, stakers of GMX tokens earn 30% of the protocol’s fees, so the platform offers real yields without diluting the token’s supply.

While the trading volume of GMX is nearly five times less than the leading decentralized exchange dYdX, it has started to threaten dYdX’s lead. Interestingly, despite having larger trading volumes, the TVL of dYdX is half that of GMX, possibly due to dYdX inadvertently incentivizing wash trading through DYDX token emissions.

Currently, the GMX platform is limited by the number of tokens traded on the platform, which includes only BTC, ETH, UNI and LINK, whereas dYdX offers perpetual swaps in 36 cryptocurrencies. This will change after the launch of synthetic tokens on GMX, enabling synthetic mints for numerous tokens.

GMX also offers spot trading for specific pairs, making it ideal for integration across other platforms that want to use leverage trading or exchange liquidity. For instance, JonesDAO recently deployed a liquidity provider vault by leveraging GMX’s design.

Gains Network, a synthetic paper trading platform originally on Polygon, added its platform to Arbitrum on Jan. 31, 2022. Since then, the trading activity on Gains has spiked significantly, possibly due to the numerous assets available for trading, including various cryptocurrencies, stock market indexes and gold.

Crypto analytics firm Delphi Digital recently found that Gains Network is close to reaching parity with GMX in terms of trading volume. The feat is commendable because similar to GMX, Gains Network does not incentivize trading activity through token emission. Instead, the platform follows a real yield concept.

The report added that Gains Network had the fourth-highest protocol earnings since September 2022. It will be interesting to see how these platforms compete after the launch of synthetic token trading on GMX.

What is notable is that both platforms are creating a competitive environment for derivatives trading on Arbitrum. The Ethereum layer-2 is slowly positioning itself as the leading platform for decentralized paper trading. Current leader dYdX enjoys a first-mover advantage in this space, but the time spent developing the V2 Cosmos SDK-based version clearly provides an opportunity for a liquidity-rich ecosystem like Arbitrum to prosper.

Arbitrum harbors high risk, high reward plays

Besides derivatives trading, the TVL and token price of many other dApps in the Arbitrum ecosystem have surged since the start of 2023.

Camelot, a decentralized exchange with an efficient revenue-sharing token mechanism, was one of the top gainers in the market in the last few months. The price of Camelot’s native token, GRAIL, jumped 15x since the start of the year, with the protocol’s TVL rising to a record high at $50 million.

Camelot’s token launchpad for public fundraising for Arbitrum ecosystem projects has been an astounding success. Five projects in the ecosystem raised over $20 million in a short period as high yield seekers flocked to the platform for quick gains.

Radiant Network, a cross-chain lending platform whose TVL has increased from $20 million to $120 million year-to-date, also played a significant role in expanding Arbitrum TVL. Radiant’s success can be attributed to the platform’s upgrade and improved tokenomics.

Related: 1inch users on Optimism to receive airdrop of 300K OP tokens

The Radiant community smoothened the vesting schedule for tokens and added a 5% liquidity provision requirement to RDNT trading pairs on decentralized exchanges of a user’s total liquidity to earn RDNT emissions. Beyond that, Radiant will also bring to life its cross-chain money market facility with expansion to five more chains.

There’s also evidence of funds accumulating Arbitrum ecosystem tokens. Reportedly, Arca Investments, a digital asset firm, is accumulating Arbitrum ecosystem tokens like GMX, Dopex (DPX), and Radiant Capital (RDNT). Data from Nansen also shows a significant increase in balances for RDNT tokens among smart money wallets identified by the analytics firm.

The DeFi ecosystem development on Arbitrum shows promise for sustainable growth, especially in the decentralized derivatives trading space. There’s a strong possibility that some users could be using Arbitrum only for the ARBI token airdrop. However, the recent Optimism and Blur token airdrops have shown that user activity doesn’t necessarily subside after an airdrop. Instead, it gives an opportunity for platforms to incentivize additional usage.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin price searches for direction ahead of this week’s $710M BTC options expiry

BTC’s recent price swings are the result of regulatory pressure and the Federal Reserve’s stance on U.S. inflation.

Bitcoin (BTC) bulls laid most of their options at $24,500 and higher for the March 3 options expiry, and given the recent bullishness seen from BTC, who can blame them? On Feb. 21, Bitcoin’s price briefly traded above $25,200, reflecting an 18% gain in eight days. Unfortunately, regulatory pressure on the crypto sector increased, and despite no effective measures being announced, investors are still wary and reactive to remarks from policymakers.

For instance, on Feb. 23, U.S. Securities and Exchange Commission Chair Gary Gensler claimed that “everything other than Bitcoin” falls under the agency’s jurisdiction. Gensler noted that most crypto projects “are securities because there’s a group in the middle and the public is anticipating profits based on that group.”

March 1 comments from two U.S. Federal Reserve officials reiterated the necessity for even more aggressive interest rate increases to curb inflation. Minneapolis Fed President Neel Kashkari’s and Atlanta Fed President Raphael Bostic’s comments also decreased investors’ expectations of a monetary policy reversal happening in 2023.

The stricter stance from the macroeconomic and crypto regulatory environment caused investors to rethink their exposure to cryptocurrencies. Nevertheless, Bitcoin’s price decline practically extinguished bulls’ expectation for a $24,500 or higher options expiry on March 3, so their bets are unlikely to pay off as the deadline approaches.

Bulls were “rug pulled” by negative regulatory remarks

The open interest for the March 3 options expiry is $710 million, but the actual figure will be lower since bulls became overconfident after Bitcoin traded above $25,000 on Feb. 21.

Bitcoin options aggregate open interest for March 3. Source: CoinGlass

The 1.12 call-to-put ratio reflects the imbalance between the $400 million call (buy) open interest and the $310 million put (sell) options. However, the expected outcome is likely much lower regarding active open interest.

For example, if Bitcoin’s price remains near $23,600 at 8:00 am UTC on March 3, only $50 million worth of these call (buy) options will be available. This difference happens because the right to buy Bitcoin at $24,000 or $25,000 is useless if BTC trades below that level on expiry.

Bears have set their trap below $23,000

Below are the four most likely scenarios based on the current price action. The number of options contracts available on March 3 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

  • Between $22,000 and $22,500: 700 calls vs. 6,200 puts. The net result favors the put (bear) instruments by $120 million.
  • Between $22,500 and $23,000: 1,000 calls vs. 4,800 puts. The net result favors the put (bear) instruments by $85 million.
  • Between $23,000 and $24,000: 2,100 calls vs. 1,800 puts. The net result is balanced between bulls and bears.
  • Between $24,000 and $25,000: 4,900 calls vs. 400 puts. The net result favors the call (bull) instruments by $110 million.

This crude estimate considers the call options used in bullish bets and the put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.

For example, a trader could have sold a call option, effectively gaining negative exposure to Bitcoin above a specific price, but unfortunately, there’s no easy way to estimate this effect.

Related: Bitcoin’s least volatile month ever? BTC price ends February up 0.03%

Could weak U.S. mortgage applications could benefit BTC bulls?

Bitcoin bulls must push the price above $24,000 on March 3 to secure a potential $110 million profit. However, data from an announcement from the Mortgage Bankers Association on March 1 might turn the tide favorably for BTC. The weekly volume of mortgage applications declined by 44% versus the same period in 2022, hitting the lowest level in 28 years.

Considering the negative pressure from regulators and investors’ eying the next Fed decision on March 22, bears have good odds of pressuring BTC below $23,000 and profiting by $85 million in the March 3 weekly options expiry. Still, there’s hope for Bitcoin bulls depending on how traditional markets react to the bearish mortgage applications data.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Aussie regulators review Binance Australia Derivatives over account closures

A day after Binance Australia Derivatives sent notifications of account closures to users it wrongly classified, regulators in Australia said they’re looking into the company.

Binance Australia Derivatives sent an abrupt message to a select group of users on Feb. 23, saying it would be immediately closing their accounts due to a false classification of some users as “wholesale clients.” 

This incident caused a flurry of responses from users on social media, and the next day, the Australian Securities and Investments Commission (ASIC) announced it would be conducting a “targeted review” of Binance’s local derivatives operations.

According to a statement from a spokesperson of the regulator on Feb. 24, the review of Binance Australia Derivatives will include the company’s “classification of retail clients and wholesale clients.“

The spokesperson added:

“It has not yet reported these matters to ASIC in accordance with its obligations under its Australian financial services license.”

However, the spokesperson said the regulator “is aware of Binance’s social media posts,” which were made shortly after users began posting screenshots of the notices on Twitter. 

Binance took to social media to clarify the incident, saying that it closed derivatives positions and accounts for some users who they incorrectly classified as “wholesale clients.” Currently the platform is only available to wholesale investors. 

Related: SEC files objection to Binance.US bid for Voyager assets

A few hours after its initial posts, Binance said 500 users were affected by the remediation.

A spokesperson from Binance reiterated that the exchange is “committed” to adhering to local Australian laws.

Changpeng “CZ” Zhao, the co-founder and CEO of Binance, tweeted that all users will be compensated of any losses and to ignore the FUD. He also mentioned that the company is looking into the situation to see if reopening futures in Australia will be an option in the future.

The Binance cryptocurrency exchange is the largest in the world and has been very public about its efforts to comply with the regulatory requirements of its local operations. 

Binance Australia Derivatives reportedly closes accounts and positions for some users

Binance Australia Derivatives incorrectly classified end users as wholesale investors, according to an investigation into its onboarding services.

Binance Australia Derivatives users reported abrupt notifications sent by the digital asset platform on Feb. 23, saying it is starting to close certain derivatives positions and accounts. 

According to screenshots posted by various users on Twitter, users who did not meet the requirements to be a “wholesale investor” were told all of their positions would be closed, and they would no longer be able to access the Binance Australia Derivatives platform.

Users were informed that to continue using Binance Australia Derivatives platform, they must submit the necessary evidence to meet the requirements to be classified as a “wholesale investor.” 

The notification continued to say that Binance Australia Derivatives is working on a remediation and compensation plan for users to whom it owes any refunds in light of the update.

It then said the actions that followed were in line with local regulations in Australia; therefore, the users were immediately contacted and the affected accounts closed.

Binance Australia Derivatives is the official trading name of Oztures Trading Pty Ltd. The relation to Binance is that its local Australia branch is a corporate authorized representative of Oztures.

Related: Aussie regulator flagged concerns about FTX months before collapse: Report

In its official overview published in July of 2022, it clearly states that derivatives products are offered for Australian wholesale clients only.

Nonetheless, users responded to Binance’s post on Twitter, with one Australia-based user claiming that they could no longer stake their crypto due to regional issues. Another claimed that flexible earn was no longer available in Australia, to which the Binance support team responded to look into the issue.

Earlier in February, Australia bolstered its watchdogs for the crypto space as a part of its “multi-stage” plan to fight scams.

Ethereum derivatives data suggests $1,700 might not remain a resistance level for long

ETH derivatives data shows bullish traders becoming more comfortable with the $1,700 price level, creating an opportunity for further rallies.

The price of Ether (ETH) rallied 18% between Feb. 13 and Feb. 16 but has since been range trading near the $1,700 level. Despite the recent price improvement, Ether derivatives metrics remain neutral-to-bullish as investors ponder the tighter regulatory environment and the potential impact of Ethereum’s Shanghai upgrade.

Investors’ biggest concern right now is regulation, especially after the United Kingdom’s Financial Stability Board recently stated that most stablecoins fail to meet international standards. The FSB was created by the G20 and is affiliated with the Bank of International Settlements. FSB chair Klaas Knot stated that the appropriate regulation of crypto-assets should be “based on the principle of same activity, same risk, same regulation.”

In more positive news, there has been some improvement in China after the government is reportedly taking a softer approach to Hong Kong’s crypto hub aspirations. According to a Feb. 20 Bloomberg report, representatives from China have been frequenting Hong Kong crypto gatherings seeking to understand local crypto business operations.

A recent Binance report detailed the status of Ether staking and explored why the Shanghai upgrade may not result in the ETH sell pressure that some traders have predicted. Their rationale is based on liquid staking derivatives, which allow users to benefit from staked Ether while retaining the ability to sell the derivative token.

Let’s look at Ether derivatives data to understand if the $1,700 price rejection has impacted crypto investors’ sentiment.

ETH futures show higher demand for leverage longs

The two-month futures annualized premium should trade between 4% to 8% in healthy markets to cover costs and associated risks. However, when the contract trades at a discount versus regular spot markets, it shows a lack of confidence from traders and is a bearish indicator.

Ether 2-month futures annualized premium. Source: Laevitas

The chart above shows that derivatives traders are no longer neutral-to-bearish after the Ether futures premium exceeded the 4% threshold. More importantly, it shows resilience even as ETH failed to sustain the $1,700 support on Feb. 21.

The lessened demand for leverage shorts (bears) does not necessarily translate to an expectation of positive price action. Traders should analyze Ether’s options markets to understand how whales and market makers are pricing the odds of future price movements.

Options risk metrics move away from bearish sentiment

The 25% delta skew is a telling sign when market makers and arbitrage desks are overcharging for upside or downside protection.

In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 10%. On the other hand, bullish markets tend to drive the skew metric below -10%, meaning the bearish put options are in less demand.

Ether 30-day options 25% delta skew: Source: Laevitas.ch

The delta skew flirted with the bearish 10% level on Feb. 14, signaling stress from professional traders. However, the situation improved through the week as the index moved close to 0 — indicating similar upside and downside risk appetite.

Currently, options and futures markets point to pro traders moving to a neutral-to-bullish sentiment, displaying higher odds of ETH breaking above the $1,700 resistance. Consequently, the odds favor Ether bulls as investors remained calm despite the regulatory pressure and negative emotions associated with the upcoming Shanghai upgrade.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.