Derivatives are contracts that allow cryptocurrency and traditional finance traders to benefit from future price fluctuations of the underlying entity.
Derivatives are one of the oldest finance instruments now on the rise in cryptocurrency thanks to its DeFi (Decentralized Finance) environment. Derivatives allow users to maximize their profits from the massive price swings, extremely common in the crypto sector. Crypto-derivatives also include all traditional options like futures, options, and swaps, reflecting its popularity as the cryptocurrency derivatives market displays over 150% year-on-year growth (according to Tokeninsight, the blockchain research company).