Tether Launches on Blockchain Futures Platform

The crypto world is still alive despite the spread of the coronavirus. As the volume of Bitcoin derivatives trading continues to surge, the crypto industry keeps tapping more cryptocurrency markets for futures trading, such as stablecoin Tether (USDT).

A derivatives arm of IDG-backed crypto exchange, KuMEX, announced that it would roll out USDT-margined Bitcoin perpetual contracts on March 30, 2020. KuMEX is managed and operated by the KuCoin team. The official announcement was made on March 27.

KuMEX Supports USDT and Bitcoin Currently

The new type of futures contract is set for launch in the coming week. However, KuMEX users can already deposit USDT through the web or public API starting from March 26, according to an official statement from the company. Moreover, KuMEX offers cryptocurrency derivatives trading up to 100x leverage.

KuCoin told reporters that Tether would become the second crypto supported on KuMEX after Bitcoin. Soon, the company also plans to support other major cryptos like Bitcoin Cash (BCH), Ether (ETH), Bitcoin SV (BSV), and XRP for trading on KuMEX.

Perpetual Contracts in Crypto

By description, a perpetual contract is a select type of futures contract. It can also be defined as an agreement to buy or sell a crypto asset on a particular future date at a specific price. On the contrary, compared to the traditional form of futures, a perpetual contract has no expiry date, and its trading is entirely based on an underlying index price.

The index price comprises of the average price of an asset that is set in line with major spot markets coupled with their relative trading volume. In that context, KuMEX’s BTC/USDT spot index will be made up of the volume-weighted average price of BTC/USDT.

Moreover, it will exist across six major crypto exchanges, including OKEx, Binance, and Huobi. KuCoin added that the trading volume would get adjusted quarterly.

KuMEX Sees almost $100 Million in Average Daily Trading Volume

The newly appointed CEO at KuCoin Global, Johnny Lyu, said that the USDT perpetual contracts would be:

“Clearer and easier for new futures traders to make investment decisions using USDT.”

He believes that the contracts will also reduce the volatility created by the non-pegged tokens. Lyu explained:

“By introducing the world’s first Lite Version of Bitcoin futures platform, supporting 10+ languages and now the launch of USDT Contracts, KuMEX is committed to building a simple, reliable and transparent futures platform. The USDT Perpetual Contracts will enable new futures traders to mitigate the volatility brought by non-pegged tokens.”

Moreover, the KuCoin team insisted to reporters that KuMex decided to select USDT as the first stablecoin supported on the platform since the coin is far more stable. They determined USDT’s stability in comparison with Paxos’ PAX and Circle’s USDC with regards to liquidity, market capitalization, and user recognition.

A KuCoin spokesperson explained that the introduction of USDT perpetual contracts on KuMEX comes as the average daily trading volume of the derivatives platform reached almost $100 million.

Coming after the trend of the overall growth of cryptocurrency derivatives trading, perpetual trading on crypto markets are becoming more popular continually. In that context, Binance reported a considerable increase in trading volumes across its futures perpetual contracts for January 2020. Binance ranks among the biggest crypto exchanges in the world by trading volume.

The BTC/USDT perpetual contract was the most popular contract in January 2020. It recorded a return of almost 30%.

Other Developments

Adding to the launch of the USDT Perpetual Contracts, KuMEX is launching a series of giveaway activities to reward its users. Traders can share up to 400,000 USDT by sampling the USDT Perpetual Contracts. Additional rewards will be given away according to the trading volume in the market.

The KuCoin team created the KuMEX platform on July 8, 2019. KuMEX is currently the only crypto futures platform that supports Level 3 Data. It enables users to check all trades on the exchange, which allows them to avoid strange liquidations that arise from market manipulation.

KuMEX currently supports 13 languages, including Russian, English, Turkish, Chinese, and Vietnamese. The platform offers up to 100x leverage.

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