The cryptocurrency derivatives market has undergone a seismic shift in recent years, evolving from a niche trading arena into a high-stakes financial battleground. Once dominated by a single player, the landscape now resembles the ancient Chinese "Warring States" period—fierce, fragmented, and defined by relentless innovation. In this new era, the key to dominance isn't just scale or volume, but product ingenuity, user-centric design, and strategic foresight.
The Rise of Institutional-Grade Platforms
In September 2019, Bakkt launched with great fanfare as a potential catalyst for a new bull run. Yet its debut was underwhelming—just 28 BTC traded in the first 12 hours. Critics dismissed it as overhyped. But beneath the surface, a transformation was brewing.
Fast forward to today: Bakkt’s daily trading volume has surged to an average of $30 million (around 1,700 BTC)—a 30x increase from its early days. On September 17, it recorded a staggering 18,718 BTC in single-day volume, signaling growing institutional traction.
Simultaneously, CME Group has ramped up its crypto derivatives activity. According to Skew data, CME’s average daily volume has doubled from $5 billion to $10 billion over the past six months, briefly exceeding $20 billion**. Its open interest has also surpassed **$1 billion, setting new records.
These developments reflect a broader trend: traditional finance is no longer on the sidelines. The influx of regulated players is reshaping market structure, increasing liquidity, and boosting credibility.
From Monopoly to Multipolarity: The End of BitMEX’s Reign
For years, BitMEX ruled the crypto derivatives world. But a series of missteps eroded its dominance:
- March 2020 ("3.12"): Platform outage during extreme volatility damaged trust.
- May 19, 2020: Another hour-long downtime amid market swings.
- October 1, 2020: Co-founder Arthur Hayes’ CTO arrested; CFTC lawsuit filed.
These events triggered a steady decline in BitMEX’s market share. By December 2020, its daily volume had fallen out of the top five, representing just 30% of the average volume of the top three platforms.
This vacuum was swiftly filled. According to TokenInsight’s Q3 2020 Digital Asset Derivatives Exchange Report, Huobi Futures, BN Futures, and OKEx now dominate, collectively capturing 48% of total market volume. BitMEX slipped to fourth place with less than 10%.
Thus began the "Three Kingdoms" era—a multipolar market where innovation, not just infrastructure, determines leadership.
Why Product Innovation Is the New Battlefield
Derivatives trading is inherently more complex than spot trading. While spot markets revolve around simple buy/sell actions, futures and options involve leverage, margin mechanics, liquidation protocols, and settlement models—all areas ripe for differentiation.
Platforms that master these nuances gain a competitive edge. And few have leveraged this better than Huobi.
Full-Spectrum Derivatives Coverage
Since launching in December 2018, Huobi has built one of the most comprehensive derivatives suites in the industry:
- USDT-margined perpetual contracts
- Coin-margined perpetual contracts
- Coin-margined delivery futures
- Options contracts
This one-stop-shop model allows traders to execute diverse strategies—from hedging with options to leveraged speculation—without switching platforms.
Within each category, granularity is impressive:
- Delivery futures offer weekly, bi-weekly, quarterly, and bi-quarterly expiries.
- Options are available weekly and quarterly, with multiple strike prices and both call/put options.
For active traders, this depth means greater flexibility and precision in portfolio management.
Smarter Risk Management: Protecting the Trader
One of the biggest pain points in derivatives trading is forced liquidation. A sudden price swing can wipe out a position entirely—especially on platforms with rigid margin systems.
Huobi introduced tiered liquidation mechanisms that reduce the risk of total position loss. Instead of all-or-nothing liquidation, the system gradually closes positions starting with the most unprofitable ones—giving traders a chance to recover.
Even more critically, Huobi has maintained a zero clawback policy. Unlike many platforms that force profitable traders to cover losses during extreme events (a process known as "auto-deleveraging"), Huobi uses its risk reserve fund to absorb shortfalls—as long as the fund remains positive.
To date, Huobi has achieved zero cross-user loss allocation across all contract types, a rare feat in the volatile world of crypto derivatives.
The U-Turn: How USDT-Margined Contracts Are Changing the Game
Among all derivative products, USDT-margined perpetual contracts have seen explosive growth. They’re simpler for beginners (denominated in stablecoins), easier to hedge, and more predictable in P&L calculations.
Huobi’s USDT-margined perpetuals have grown at an astonishing pace:
- Cumulative volume exceeded $60.489 billion by December 4.
- Daily volume surged by 951,555% compared to launch day.
- Within two months, they accounted for 22.7% of Huobi’s total contract volume.
To support this demand, Huobi introduced groundbreaking features:
Dual Margin Mode Flexibility
Most platforms require traders to choose between cross-margin (shared collateral) and isolated-margin (per-position collateral)—and stick with it. Changing modes means closing positions.
Huobi broke this constraint by allowing users to:
- Switch between cross and isolated margin even with open orders or positions.
- Hold both types simultaneously for the same asset (e.g., BTC/USDT).
This flexibility empowers traders to:
- Use isolated margin for high-risk speculative trades.
- Use cross margin for hedging or portfolio-wide exposure.
- Adapt strategies dynamically without exiting positions.
Real-Time Profit Settlement & Capital Efficiency
Huobi supports real-time profit withdrawal for major assets (BTC, ETH, LINK, LTC, XRP) in both margin modes. After closing a position, realized gains (net of fees and used margin) can be withdrawn immediately—no waiting for funding结算 cycles.
Additionally, Huobi’s locked position margin optimization reduces capital lock-up. When holding both long and short positions in the same asset, only the net exposure is margined—freeing up capital for other trades.
This is particularly valuable for arbitrageurs and market makers who rely on tight capital efficiency.
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Frequently Asked Questions
Q: What caused BitMEX’s decline in the derivatives market?
A: A combination of technical failures (repeated outages), regulatory pressure (CFTC lawsuit), and leadership issues led to a loss of user trust and declining trading volume.
Q: Why are USDT-margined contracts so popular?
A: They’re priced in stablecoins, making P&L easier to calculate and reducing volatility exposure from the margin asset itself—ideal for both novice and professional traders.
Q: How does tiered liquidation protect traders?
A: Instead of wiping out an entire position at once, the system closes portions incrementally based on loss magnitude, giving accounts time to recover or add margin.
Q: What is auto-deleveraging (ADL), and does Huobi use it?
A: ADL forces profitable traders to absorb losses during extreme events. Huobi avoids this by using its risk reserve fund and has maintained a zero clawback record.
Q: Can I use both cross and isolated margin on Huobi at the same time?
A: Yes—Huobi allows dual-mode usage even for the same trading pair, offering unmatched flexibility in strategy execution.
Q: How does real-time profit settlement benefit traders?
A: It allows immediate access to profits after closing a position, improving capital turnover and enabling faster reinvestment or withdrawal.