Bybit to Settle Options Contracts in USDC
- The company supports BTC, Ether (ETH), USDT, and USDC, particularly as collateral. However, Bybit still reiterates interest in adding more crypto assets in the coming future.
A popular crypto derivatives exchange, Bybit has announced the plan to offer settlements of options contracts through USD coin (USDC). Bybit maintained that USDC will pave the way for price stability for the duration of each contract.
” Our derivatives platform has the world’s best liquidity and tightest spread, so traders are ensured the best quote and best execution in the market even during extreme volatility,” added Ben Zhou, co-founder and CEO of Bybit.
The derivative market is perhaps one of the largest, running into hundreds of trillions, that makes the crypto market extremely volatile. Due to its immense potential energy, crypto derivatives exchanges have thrived in the past few years.
As the crypto market continues to experience more price correction, more liquidations happen in derivatives exchanges. However, ByBit has come in with a remedy for that problem by introducing a stablecoin, for this case USDC.
ByBit Leaning Towards Stablecoins
As of today, USD coin ranks as the second-biggest stablecoin by market cap, whereby Tether’s USDT has been leading. According to the crypto derivatives exchange, the decision to adopt USDC for options contract settlement manifested owing to the consistent stability of the stablecoin.
Bybit believes the asset possesses the tendency to stand firm against any backdrop occasioned by crypto uncertainties. Additionally, most crypto experts had over time recommended USDC in the wake of the prevailing market volatility. The analysts see stablecoin as a more reliable and open alternative to other digital assets.
Worth noting, the company supports BTC, Ether (ETH), USDT, and USDC, particularly as collateral. However, Bybit still reiterates interest in adding more crypto assets in the coming future.
The options market is one of the most complex yet manageable businesses. Investors bets on future prices of assets at random, thereby leaving it uncapped of investments. It is safe to categorize the futures and options market with institutional investors.
According to findings, many of the existing crypto options are margined and offered settlements with similar currency. For instance, when Ether (ETH) becomes used as collateral for a contract, its settlement is perfected with the same ether. Bybit, however, averred that its decision to consider USDC as a means of crypto options settlement is the first of its kind.
More so, every settlement has a pre-determined date. As reported, the settlement date is best described as the date through which trade becomes fully finalized. Here, the purchaser is expected to affect an agreed payment to the seller, just as the latter is expected to convey the assets to the buyer. As programmed, options contracts and all other derivatives possess settlement dates for trading.
The Ugly Side
The crypto market is extremely volatile and not even the Stablecoin market can guarantee 100 percent success. Remember last month, Terra’s UST crashed to zero from its dollar peg. The UST prior to the crash was undoubtedly the third-largest stablecoin by market cap. Similarly, Tether (USDT) also lost over $10 billion in market cap owing to the increasing redemption of tokens by investors.
Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”
