Thread by @balanipankaj

Perpetual Swaps are expensive to trade!

We compared Futures & Perpetual Swaps to see which is better for #trading
Futures outperformed Swaps in 13 out of 16 months. Irrespective of #bitcoin performance.
GREEN: $BTC monthly returns were +ve
RED: $BTC yielded -ve monthly returns

In DOWN months, i.e. where $BTC monthly returns were negative shorting via Futures would've yielded higher returns

This underperformance makes Perp. Swaps poor instrument for hedging

“Hedging Bitcoin balance by shorting 1x Perpetual Swap” would've cost you roughly 2% per month

For UP months ( where $BTC monthly returns were positive) a levered Long in Futures would have given higher returns.

Funding eats away from the returns of a trade!
#cryptocurrency #cryptos

But perpetual swaps WIN.

Despite being expensive Perp. Swaps command higher share of volumes.

Share of volume in #Bitcoin Futures has declined by a factor of 10 over last year.
We expect this number to rise as more institutional investors enter market.

Volumes in #Bitcoin Perpetual Swaps have also reduced but total volumes are still as high as late 2017.
We saw more leveraged trading on the way down as compared to when #bitcoin was moving higher.

Something is changing for Futures though!
Share of volumes in longer maturity futures has continuously increased over past 4 quarters.

Up from 20% to 40%. More sophisticated traders seem to be entering markets.

Lesser spread trading opportunities:

Complete post on Futures Vs Swaps: bit.ly/2SGRuVX

Disclaimer: We only have futures listed as of yet. We are launching Swaps in coming weeks.

#cryptos #cryptocurrency #bitcoin #Bitcointrading

Would love your thoughts: @bambouclub @zhusu @RNR_0 @hasufly @KyleSamani

Wanted to share with you @MoonOverlord @TheCryptoDog @CryptoDonAlt @skew_markets thanks.