Token Derivatives

Definition ∞ Token derivatives are financial instruments whose value is derived from the price of an underlying cryptocurrency or digital token. These products, such as futures, options, or perpetual swaps, allow investors to speculate on price movements without directly owning the asset. They offer advanced trading strategies and risk management tools within the digital asset market.
Context ∞ The market for token derivatives is a rapidly expanding segment of the cryptocurrency ecosystem, attracting both retail and institutional traders. Regulatory scrutiny of these products is intensifying due to concerns about market manipulation, leverage, and investor protection. Future developments will likely involve clearer regulatory guidelines and more sophisticated product offerings to meet evolving market demands.