PowerTrade, the first mobile crypto options application, is set to launch on the Apple iOS app store on April 15th, offering retail traders the opportunity to buy Call and Put Options on Bitcoin in 3 clicks.
Bitcoin derivatives and options markets have grown tenfold in the last 12 months, however, retail is underserved by current platforms which are complex to use.
The PowerTrade app prioritises user education through design and launches with fee-free trading for all early users.
Paul Veradittakit of Pantera Capital said:
“The PowerTrade team has the right mix of institutional/trading and crypto experience and with this supporting cast of investors, is in a great position to deliver on their vision. With success, I can see the entire crypto derivatives market expanding to more mainstream users and growing exponentially.”
Crypto derivatives heating up
As Bitcoin continues to break record highs, the Bitcoin derivatives market has mirrored this growth with futures reaching $2.13 trillion and options $28.63 billion in trading volume in March 2021, a tenfold increase over the $2.57 billion in March 2020.
While there is a growing mainstream demand for Bitcoin today, there are still segments of the market that are expected to mature, which turns us to the final frontier of crypto finance: options.
In traditional equity markets, options markets are roughly half that of futures markets. If we expect the same market structure to evolve in crypto currency markets, that would mean ~35x growth in options markets relative to the futures markets.
This would make the Bitcoin options market a $12.78 trillion annual market at current volumes.
The catalyst for massive options growth
While there is large and growing demand for crypto options today, there are still segments of the market being underserved by the current crypto landscape.
The majority of crypto options trading is currently dominated by institutional traders with 93% of the volume happening on institutional options platform, Deribit, which has high minimum trade sizes and is geared towards professional traders.
According to Anand Gomes, CEO of Paradigm messaging platform, their service facilitated 20% of the options trading volume in March. Paradigm specializes in private block trades, which are restricted to large order sizes for institutional traders. All of which suggests that the large majority of crypto options trading is still occurring at the institutional level.
This is at odds with the rest of the crypto market, which is largely driven by retail trading in both the spot and futures markets. This is evidenced by the massive growth of retail focused spot exchanges such as Binance or Coinbase, with their $100+ billion IPO, while institutional only focused exchanges fail to gain significant market share.
Looking at Google trends searches for “Bitcoin options” suggests a growing trend of retail interest in Bitcoin options.
Given these indications, it is logical to conclude that the retail audience is a powder keg of options trading growth waiting to be ignited with the right catalyst.
CMS Holdings said:
"We’re excited about the tremendous continued growth potential in the emerging crypto options space. With retail interest in equity options at an all time high, we think it’s only a matter of time until we see a team successfully launch these products for the crypto community."
PowerTrade retail options trading platform
Why has the retail market not yet taken to options trading like they have futures and margin trading? In the user research conducted by PowerTrade, retail users largely indicate that the current offerings are too complicated to use and only geared towards professional traders.
Common complaints cited were confusing interfaces, not understanding how it worked, and high minimums to participate. Despite high interest for options trading, most retail traders gave up in their attempts to trade options using these professional tools.
The PowerTrade interface has been designed with the retail trader in mind, and has received high praise from early beta users.
Crypto influencer That Martini Guy tweeted:
“Trying out @PowerTradeHQ beta 😍
Its a very simplified way of trading options on #Bitcoin i like it so far, very nifty simple app 👍”
With a focus on educating beginners about crypto options trading, PowerTrade will onboard a new wave of retail traders in the options markets this April 15th.
Mario Gomez Lozada, PowerTrade CEO, said:
“We’re very excited for the public to finally experience the PowerTrade vision we’ve been working towards over the past year!”
PowerTrade was founded by Mario Gomez Lozada, founder of Japan’s unicorn exchange Liquid.com, and a team of cryptocurrency industry veterans. PowerTrade’s mission is to make it as easy as possible for traders everywhere to buy crypto options on their phone.
PowerTrade raised a $4.7m token sale in September 2020 led by Pantera Capital and joined by Framework Ventures, CMS Holdings and QCP Capital among others. Prominent founders Kain Warwick of Synthetix, Loi Luu of Kyber Network and Bobby Ong of CoinGecko also participated.
Earlier this year, renowned crypto research firm Delphi Digital proposed a new architecture for the PowerTrade Fuel token, which covers insolvency risks related to exchange margin collateral. At the time of writing, the PTF token was trading at $2 with a market cap of $45,223,982, according to CoinGecko.