Binance Futures Quarterly Report: Q2 2022
Key Takeaways:
Binance Futures introduced a series of trading system upgrades throughout the second quarter of the year to improve performance and stability.
We strived to give traders and investors more ways to diversify their portfolios by listing several USDT-M, COIN-M, and BUSD-M Perpetual Contracts.
We also put emphasis on the user experience by launching new products and services that aim to help cryptocurrency traders succeed.
The cryptocurrency market saw a significant spike in volatility during the second quarter of the year. The macroeconomic environment appears to have played a significant role as investors moved away from risk-on assets like cryptocurrencies to seek a safe-heaven.
Binance Futures made significant strides in Q2 2022 to equip traders with the right tools to help them succeed even in the most precarious market conditions. We upgraded our system to make it an institutional-grade trading platform, added new trading pairs to meet the increasing demand, and incorporated new features like the Time-Weighted Average Price (TWAP) trading algorithm to improve user experience.
All of our work was done to benefit our users and the global community of cryptocurrency traders. We’re proud of the milestones that Binance Futures achieved throughout the second quarter of the year and invite you to take a closer look at what we’ve done to continue improving the world’s largest crypto derivatives exchange by trading volume.
Better, Faster, Stronger
Binance Futures conducted a series of trading system upgrades throughout the second quarter of the year to improve performance and stability. We also made critical updates to the margin tiers and leverage of multiple USDⓈ-M and COIN-M Perpetual Contracts to meet the market demands. More importantly, we extended trading fee discounts for BUSD-M Perpetual Contracts to help new and existing users make the most out of their trading strategies.
We strived to give traders and investors more ways to diversify their portfolios in Q2 2022 as we launched six new USDT-M Perpetual Contracts, four new COIN-M Perpetual Contracts, and 17 new BUSD-M Perpetual Contracts on Binance Futures. We also listed two new USDⓈ-M Quarterly 0930 Perpetual Contracts and nine new COIN-M Quarterly 1230 Perpetual Contracts. Additionally, we added 20 new borrowable assets on Cross Margin and 17 new borrowable assets on Isolated Margin to adapt to the fast-growing ecosystem.
Our efforts to help cryptocurrency traders succeed extended to new products and services with the launch of features that improved the user experience. The goal was to provide enterprise-grade tools that allow users to gain more insights to time the markets better.
The scope of new features we added to Binance Futures include trading algorithms, sub-account functions, liquidity analysis tools, and many more:
Time-Weighted Average Price
The Time-Weighted Average Price, or TWAP, trading algorithm is an algorithmic trade execution strategy that aims to achieve an average execution price close to the time-weighted average price during a specific period. It allows traders to execute large orders while mitigating the market impact by slicing the orders across regular intervals of time.
Volume Participation
The Volume Participation, or VP, trading algorithm is an opportunistic algorithm for executing large orders with specified urgency. It aims to execute a trade approximately in proportion to the real-time market volume by respecting the targeted volume participation level.
Strategy Trading
The Strategy Trading Landing Page aggregates Grid Trading, TWAP, VP, and other automated algorithmic trading features. It provides a comprehensive display of Futures Grid Trading strategies while allowing users to replicate different parameters based on their performance and popularity.
Liquidity Analysis
The Liquidity Analysis Section displays customized Cost To Trade, Bid-Ask Spread, and Book Depth charts for selected USDⓈ-M and COIN-M Perpetual Contracts available on Binance Futures. It helps eligible high-frequency trading users visualize the most liquid trading pairs to support bigger market orders.
Funding Rate Arbitrage
The Funding Rate Arbitrage Table displays updated data, including Cumulative Funding Rates over the last 3, 7 and 30 days, APR, Spread Rate, and Open Interest to deploy arbitrage strategies. It provides users with arbitrage information about Perpetual Futures Contracts and their spot equivalents in the market.
Historical Market Data
The Historical Market Data Page offers access to K-line, AggTrades, Trades and Futures Order Book data for up to two years. It allows users to download historical market data directly through the website or request it via API.
Binance API
The Binance API Page presents an overview of all the services available to Binance API users. It enables quick and seamless access to the API documentation of different products and services. Meanwhile, the Fast API function allows users to create API keys, automatically connect to third-party API broker platforms, and delegate specific account permissions to API brokers.
Portfolio Margin
The Binance Portfolio Margin Program consolidates margin balances across Futures and Margin with over 200 effective cryptocurrency collaterals. It is designed for traders to cross-hedge and optimize risk management by combining supported crypto assets and positions in USDⓈ-M and COIN-M Futures, and Margin accounts as one single effective joint collateral to determine the account equity, margin balance, and maintenance margin requirement.
Sub-Account
The Sub-Account Function is now available on the Binance App. It enables master account holders to view the asset summary and balances of selected sub-accounts or all sub-accounts anytime, anywhere, from the palm of their hand.
Open Order Modification
The Open Orders Modification Feature is available for COIN-M Perpetual Contracts. It allows users to modify unfilled orders by adjusting their price or quantity via open orders, K-Line, or through Binance API.
Bringing the Crypto Community Together
With more than 29 million active users, Binance Futures launched multiple trading tournaments in Q2 2022 to bring together the global community of cryptocurrency traders.
One of the most emblematic and highly anticipated trading events was the Futures Grand Tournament. It hosted more than 90,000 participants and nearly 1,200 teams with a prize pool of $300,000 and 1,400 NFTs, with one team setting a new trading volume record.
We also celebrated the addition of the JASMYUSDT, WOOUSDT, and BNXUSDT USDⓈ-M Perpetual Futures Contracts to Binance Futures by committing 50,000 BUSD in a giveaway for each promotion. Regular and VIP 1-2 users who traded these contracts throughout the tournament were eligible to grab a share of the prize pool.
The overall participation rate in these trading tournaments blew past our expectations, given the market conditions seen during the second quarter of the year. We would like to thank all of our users for solidifying Binance Futures’ position and reputation as the world’s largest crypto derivatives exchange by trading volume.
Binance Futures Insights
Binance Futures saw a substantial uptick in interest for BUSD-M Perpetual Contracts during the second quarter of the year. The addition of 17 new BUSD-M pairs appears to have significantly contributed to the spike in trading volume as BUSD became the third largest stablecoin in the cryptocurrency market.
The total amount of BUSD-M Perpetual Contracts traded in Q2 2022 averaged $3.80 billion per day, starting at $2.58 billion on Apr 1 and closing on Jun 30 at $6.62 billion.
Despite the increasing popularity of BUSD-M Perpetual Contracts, USDT-M Perpetual Contracts accounted for 91.97% of the total trading volume in Q2 2022. An average of $43.52 billion worth of USDT-M Perpetual Contracts were traded daily throughout the second trimester of the year, with a spike of $121.41 billion recorded on May 11th.
The most-traded Perpetual Contract on Binance Futures in Q2 2022 was BTCUSDT, which recorded trading volumes of more than $1.28 trillion. The second one was the ETHUSDT contract with $549.75 billion in trading volume, followed by GMTUSDT with an aggregated quarterly trading volume of $232.28 billion.
On the other hand, the least traded Perpetual Contracts were 1000BTTCUSDT with $87.91 million in trading volume and YFIIUSDT with $154.62 million.
Although the total trading volume across Binance Futures surpassed $5.09 trillion, there was a significant decline in open interest. This metric helps understand the number of open long and short positions of USDⓈ-M Perpetual Contracts. It opened Q2 2022 at $11.68 billion and closed at $5.29 billion, representing a 54.70% decline, correlating with the market dynamics seen during this period.
Interestingly, most traders kept an optimistic approach to trading cryptocurrencies in the Meme, Infrastructure, and Metaverse market sectors.
The combined 1000SHIBUSDT and DOGEUSDT Long/Short Ratio was as high as 3.75. The overall Long/Short Ratio for the Infrastructure sector, which includes ANKRUSDT, TKUSDT, CVCUSDT, DENTUSDT, GALUSDT, GTCUSDT, HNTUSDT, JASMYUSDT, LPTUSDT, and NKNUSDT, was 3.50. Meanwhile, trading pairs in the Metaverse sector, such as ALICEUSDT, AXSUSDT, GALAUSDT, GMTUSDT, MANAUSDT, SANDUSDT, and TLMUSDT, maintained an average Long/Short Ratio of 3.26.
Onwards and Upwards
As the cryptocurrency industry continues to expand, Binance Futures plans to provide traders with the most comprehensive set of financial tools that will help them navigate through this market. We are devoted to improving our trading system to meet the ever-growing retail and institutional demand and our listing requirements to stay ahead of the trend.
Our team is also working to create educational content about all the products and services we offer to equip novice traders with the knowledge they need to trade responsibly and become successful in this profession.
If you are passionate about cryptocurrencies and our mission, head to our careers page to view our latest job openings.
DISCLAIMER: Other than disclosures relating to Binance, this report is based on public information, and we do not represent it as accurate or complete. It should not be relied on for making investment decisions or be construed as investment advice. The information, opinions, estimates and forecasts provided in this report are subject to change.
The price and value of digital assets may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.
This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of an individual. You should consider whether any advice or recommendation in this research is suitable for your particular circumstances and, if appropriate, seek professional advice, including tax advice. Binance accepts no liability for any losses arising from the use of information in this report.
Binance and its affiliates, officers, directors, and employees, or people from their households will, from time to time have, hold positions in, act as principal in and buy or sell the digital assets or derivatives, if any, referred to in this report, unless otherwise prohibited by regulation or Binance policy. This report has not been prepared in accordance with any legal requirements designed to promote the independence of investment research.
This report is not intended for distribution in jurisdictions where that distribution would be contrary to any applicable law. We are not responsible for the redistribution of our research by third parties. The digital assets described in this research may or may not be available for sale in all jurisdictions.
Binance is not responsible for any risks associated with accessing third-party websites, including the use of hyperlinks.