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OKEx Research: Effects Of New Products, And Waves

|About: Tether USD (USDT-USD)

Correlation of OKEx USDT-margined futures, to its folk.

Mixed relationship towards year-end, and brought back to normal.

OKB’s integration of the whole crypto market is still in progress.


1. Correlation of OKEx USDT-margined futures, to its folk

  • Found a higher connection to its underlying, compared to coin-margined futures.
  • Even more, testing on BTC to ETH, USDT-margined futures shows a closer relationship.
  • This is coming from the product’s design, providing simpler and more intuitive products to users.
  • Additionally, the volume distribution is different from what coin-margined futures have.

2. Mixed relationship towards year-end, and brought back to normal.

  • During the 2nd week to the 3rd week of December, the difference between the period changes to all negative.
  • The trend was brought back to all positive in the following week, which shows “Back to Normal”.

3. OKB’s integration of the whole crypto market is still in progress.

  • From the last report, OKB was highlighted due to its partnership and level changes in the market.
  • The drive remains, and OKB needs re-evaluation from markets taken as the utility token of the world's largest crypto exchange.

I. Correlation of OKEx Major Tokens

  • Compare to YTD to Dec., ETC is detaching itself from the whole market move.
  • OKB’s integration to the whole market is still in progress, although the strength is getting smoother compared to the last observation. This should be also checked with other utility tokens, especially crypto exchanges, since the OKB was undervalued compared to the others.
  • In terms of price dominance and movements, not only ETH but also LTC, BCH, XRP, ETC have higher number during Dec., where ETH is still on top from Year-to-Nov.

II. Microscope on Correlations

  • Nothing particular.

  • TRX is getting away from the whole market in this period.
  • The overall market showed all negative correlation changes to each other.

  • TRX reverts back its independent movements to relational movement, which is getting back to longer-term correlation level.
  • The overall market also changed the direction of correlation changes, positive to each other which is interesting to the author and many market observers.

III. OKEx USDT margined future

As mentioned in the previous report, OKEx USDT Margined futures are now all launched successfully, mirroring the same underlying and maturity of existing Coin Margined futures. And, we could see the market interest and demand through the volume increase. One interesting fact till today after introduction to the market, the trading volume of those USDT margined futures on different maturity — Weekly, BiWeekly and Quarterly — are almost equally distributed.

This is a big difference from the coin-margined futures, which is mostly occupied by Quarterly’s trading volume. Isn’t this curious for your quest, in terms of new trading strategies and hedging activities?

Following shows volatility of BTC and ETH’s spot, Coin and USDT margined futures during last month.

Furthermore, we checked their relationship with the same blood and its siblings.

  • At the start of the new product launch, USDT Margined products were not moving in sync with their underlyings. However, now it shows stronger connectedness as getting grow and stable, surely due to its linearity and simplicity. Even more, among the same tribe, Spot to USDT Futures relationship shows the closest relationship!
  • Moreover, BTC to ETH, as indicated in red boxes, USDT Margined futures shows the highest connection on price movements, which was enabled by easier calculation and switching over to different markets.
  • Seems interesting, so we will expand this check to the whole futures market on OKEx, and upcoming OKEX Crypto Options (Go-live on Jan.9 2020), and deliver how product innovation is reshaping the markets. Stay tuned!

Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.