Turbocharged bets by investors who love risky investing are becoming unpreventable.  Cryptocurrency derivatives are one of them.

For those who are new, a derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset like the security or a set of assets like an index. The common underlying instruments are bonds, commodities, currencies, interest rates, market indexes, and stocks.

In simple terms, derivatives are financial instruments, whose value is derived from other underlying assets. The four major types of derivative contracts are futures, forwards, options, and swaps.

Is there anything called cryptocurrency derivative? Technically, they are not derivatives. However, there are several regulated vehicles available in the market, which will make it possible for investors to have exposure to cryptocurrency on the mainstream trading venues.  These derivative products change the price based on the price of their underlying asset: Bitcoin.

Thus, there are crypto derivatives that permit traders to place leveraged bets on whether bitcoin, dogecoin, or other digital currencies will rise or fall. In the U.S., such products are regulated by the Commodity Futures Trading Commission.

The best crypto derivative exchanges named for 2021 are:  Binance, Bybit, FTX, Deribit, Bitmex, Gate.io, Huobi Global, OKEx, and MEXC Global.

Thus, derivatives have become an essential part of any market, whether it be the stock market, forex market, or cryptocurrency market. Traders can use different strategies either to speculate or to mitigate their losses through hedging.

Those who what to explore the cryptocurrency derivatives market should start from the exchange that facilitates it.

Binance is hailed as ideal for spot trading, rolled out margin, and derivatives trading.   The derivatives products on Binance are USD-Margined Futures Contract, Coin-margined futures contract, Binance leveraged tokens, and Binance options.

The fees for derivatives trading is also hailed to be reasonable.

Bybit offers USD Margined Perpetual, Coin Margined Inverse Perpetual, and Coin Margined Inverse Futures.

FTX offers non-inverted futures contracts on a quarterly and perpetual basis. The prediction markets are those betting on the real-world market. A digital form of traditional betting. Some of the noteworthy prediction contracts are Trump 2024, Superbowl Futures, and Options.

Deribit is exclusively for crypto futures and options. Derivative products are Deribit Perpetual, Deribit Futures, and Deribit Options.

Bitmex offers perpetual and futures contracts.  These futures contracts are settled in Bitcoin.

Gate.io, apart from perpetual and futures, offers warrants.

Huobi  Global offers Futures, Coin Margined Swaps, USDT Margined Swaps, and options.

OKEx provides offers 139 perpetual and 1336 futures contracts. Thus, a huge variety of derivative products.

MEXC Global offers perpetuals, and users also get a margin on these contracts. When deciding which cryptocurrency derivatives exchange to be used, there is a lot to be thought about. Good to start with paper trading and to deal with.