Huobi Exchange Launches Cryptocurrency Derivatives Platform

Huobi, the highly popular Chinese cryptocurrency exchange based in Singapore, has launched a cryptocurrency derivatives platform called Huobi DM.

Huobi announced the platform on Wednesday at the Cryptofrontiers conference in New York City.

According to Huobi, they cannot understate the importance of launching their cryptocurrency derivatives market platform. It represents a maturing market, and provides another on-ramp for sophisticated and institutional investors to get involved with cryptocurrencies.

As the General Counsel of Huobi’s Global Institutional team, Joshua Goodbody, put it:

Cryptocurrency is a rapidly expanding and maturing market. As part of that maturation, we see more and more sophisticated investors and traders from more established financial markets looking to gain exposure, including institutional players. At the same time, we think many experienced, successful cryptocurrency traders are looking for a broader range of investment tools than has traditionally been available. Huobi DM is tailor-made to address these sorts of needs.

About Huobi DM

Huobi DM will allow their customers to engage in cryptocurrency contract trading where participants can purchase or sell cryptocurrencies at predetermined future prices and times.

The platform allows traders to speculate on rising and falling prices, while providing tools for hedging and mitigating risk and uncertainty. Huobi DM offers contract trading for weekly, biweekly, and quarterly contracts for going short or long in these time frames.

According to Huobi, their DM platform is unique and presents an array of advantages over existing derivatives platforms in the cryptocurrency space.

For instance, Huobi DM offers large, flexible leverage options of 1X, 5X, 10X, and even 20X.

To mitigate the risk of trading with high leverage, Huobi features robust risk management protocols. Advantages specific to investors include zero trading fees for market makers and an investor protection fund of 20,000 BTC used for insurance against all forms of losses.

Huobi noted that their DM platform is still in its beta stage and that Bitcoin (BTC) will be the first and only contract available.

The BTC contract is denominated in USD, with profits and losses settled in Bitcoin. Each BTC contract has a face value of $100 and with $0.01 minimum change in order book price.

More Developments from Huobi

Huobi is establishing itself as a reputable cryptocurrency exchange in the eyes of the Chinese government. To meet the obligations of the Chinese state, Huobi Group created a Communist Party branch called the Beijing Lianhuo Information Service (BLIS).

By doing this, Huobi stands amongst the ranks of state enterprises as the first cryptocurrency business to embrace the tradition. According to Chinese law, companies with more than 3 Communist Member employees must set up their own branch, and until recently, only state enterprises did this.

Another notable development from Huobi is their creation of their very own stablecoin known as HUSD. Huobi’s customers can use the stablecoin as a safe and stable means of exchange between the 4 U.S. dollar-backed stable coins (PAX, GUSD, USDC, and TUSD) featured on the Huobi exchange.

Huobi hopes to eliminate the need to choose between stablecoins with the HUSD. It is also looking to save costs when switching between stablecoins. Additionally, HUSD will be paired against other cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH).

All in all, Huobi has been chugging along with new developments despite the bear market conditions we’ve experienced throughout 2018. The exchange appears to have a strong understanding that during times like these, it’s time to build, develop, and prepare for what’s coming.

Do you use the Huobi exchange? What do you think of their latest developments? Let us know in the comment section below.