BIT Crypto Derivatives Exchange Introduces ADA Options, Bolsters Altcoin Offerings

Cryptocurrency derivatives exchange BIT has introduced options for Cardano's ADA token, marking the expansion of its offerings beyond leading cryptocurrencies like bitcoin and ether. These ADA options enhance risk management and volatility speculation capabilities for traders, leveraging a unified margin system where coin holdings can be utilized as collateral at a discounted rate. BIT aims to introduce similar options for other altcoins, including meme coins, in the future, diversifying its portfolio and catering to a broader market.

Cryptocurrency Derivatives Exchange BIT Launches ADA Options, Expands Altcoin Derivatives Offerings

On Wednesday, cryptocurrency derivatives exchange BIT unveiled options tied to Cardano's native token, ADA. This move is part of BIT's ongoing commitment to expand its offerings in the alternative cryptocurrency (altcoin) market.

ADA Options Now Available

According to a press release obtained by CoinDesk, ADA options are now live on the BIT platform and are denominated and settled in U.S. dollars. Each ADA options contract represents one ADA token, a spokesperson for the exchange confirmed.

ADA's Market Significance

ADA, the native token of the Ethereum competitor Cardano, holds a prominent position as the eighth-largest cryptocurrency globally, with a market capitalization exceeding $9.73 billion at the time of writing. Notably, altcoins like ADA tend to exhibit higher volatility compared to market leaders such as Bitcoin (BTC) and Ethereum (ETH).

Options Provide Risk Management and Speculative Opportunities

Options are derivative contracts that grant the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price on or before a specified date. Call options confer the right to buy the asset, while put options provide the right to sell.

ADA Options Enhance Portfolio Management

The introduction of ADA options empowers traders to hedge against portfolio risks or capitalize on potential price fluctuations. Similar to Bitcoin and Ether options, ADA options offer traders a versatile tool for managing risk and speculating on market movements.

BIT's Unified Margin System

BIT's unified margin system offers traders the advantage of using their existing ADA holdings as collateral for trading ADA options at a discounted rate. "Users can utilize all assets in their accounts as trading collateral with a haircut ratio," BIT explained in its press release. "ADA's haircut ratio is now 15%, meaning users can use their ADA as collateral and trade options at a 15% discount," the exchange added.

Strategic Partnerships and Future Expansion

The launch of ADA options is a collaborative effort between BIT, strategic partner Darley Technologies, and market maker DWF Labs. BIT's existing suite of options includes those tied to The Open Network's TON coin, as well as Bitcoin and Ether futures and options. The exchange has signaled its intention to expand its altcoin options offerings, including meme coins, in the future.

Global Crypto Options Market

The global crypto options market, dominated by Panama-based Deribit, has reached significant proportions, with Bitcoin and Ether contracts accounting for the majority of activity. This market is known to exert influence on the spot prices of major cryptocurrencies.