Crypto Investors Can Now Trade XRP Options on BIT Exchange

Aug 17, 2023 at 12:48 pm

XRP, recognized as the world's fifth-largest cryptocurrency, currently holds a market capitalization of $30.88 billion.

In a recent move, the cryptocurrency derivatives exchange BIT introduced options linked to XRP, a cryptocurrency with a strong focus on payments. This novel offering permits users to engage in XRP options trading without the obligation to possess the underlying cryptocurrency itself. The exchange emphasized that gains and losses resulting from these options will be settled in U.S. dollars. OrBit Markets, a prominent institutional liquidity provider, has been entrusted with the responsibility of ensuring robust order book liquidity for this new venture.

This expansion marks a significant enhancement to BIT's existing array of options, which already encompasses offerings related to major cryptocurrencies such as bitcoin (BTC), ether (ETH), Cardano's ADA, Toncoin (TON), and Milady Coin (LADYS).

Options, classified as derivative contracts, provide the purchaser with the privilege to either buy or sell the underlying asset at a predetermined price on or before a specific date. A "call" option grants the right to buy, while a "put" option enables selling. Typically, traders utilize options as a strategic tool to manage bearish or bullish risks, or even to generate supplementary income by engaging in "writing" options in conjunction with their spot market holdings.

Justin Buitendam, the Global Head of Institutional Sales at BIT, expressed the exchange's pride in facilitating accessible XRP options trading for both institutional and retail traders. This development allows traders to explore long and short positions simultaneously, showcasing the exchange's commitment to a diverse range of traders worldwide.

XRP's current status as the fifth-largest cryptocurrency is underscored by its impressive market capitalization of $30.88 billion. This cryptocurrency, along with other alternative coins, tends to exhibit greater volatility in comparison to established assets like bitcoin and ether.

BIT's decision to introduce XRP options aligns with recent legal developments. In a pivotal hearing regarding the U.S. SEC's case against Ripple Labs for alleged securities law violations tied to XRP sales, a U.S. District Court stated that while XRP might not be deemed a security when offered through centralized exchanges, it could be considered one when sold directly to institutions. This nuanced distinction disrupted the SEC's attempts to categorize all alternative cryptocurrencies under a single regulatory framework.

Subsequently, multiple exchanges re-listed XRP in their spot markets. However, recent developments have brought about renewed uncertainty, as the SEC seeks to appeal the court ruling.

Following a surge of over 70% to nearly 95 cents in response to the July 13 court verdict, XRP has experienced a retracement and is currently trading at 65 cents, according to Bitsday data.

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