Financial Derivatives are contracts whose value is derived from an underlying asset, such as a stock, commodity, currency, or digital asset. These instruments allow market participants to speculate on future price movements or hedge against risks. Common types include futures, options, and swaps.
Context
Financial derivatives have gained increasing prominence in crypto news, with the expansion of regulated and unregulated platforms offering products based on digital assets. Regulators are particularly focused on how these instruments are offered and traded, seeking to prevent market manipulation and ensure investor protection. The growth of crypto derivatives markets signifies a maturing digital asset landscape.
The cryptocurrency market has seen funding rates drop to levels not seen since the 2022 bear market, indicating a significant flush of speculative leverage.
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