- BitOoda's Tim Kelly recently commented on the state of crypto derivatives trading on unregulated exchanges.
- He noted that these exchanges will destroy trading with leverage once they start going down.
- Meanwhile, regulated platforms which do seem limiting, also appear to be growing in popularity.
It has been over 11 years since the crypto industry had emerged, and over that time, it managed to diversify rather well. There is plenty of different products, with more of them emerging all the time. At the same time, the derivatives space is becoming more and more active and attractive to traders and investors around the world.
While this sector is not exactly new, it only started getting the attention it deserver recently. However, another thing to note is that the most popular platforms in the sector are the ones that are not regulated.
The founder and CEO of BitOoda, Tim Kelly, concluded as much during the recent interview on the ‘On The Brink’ podcast. Kelly stated that “I don’t know how you can possibly run unregulated derivatives exchanges. It does not matter if you are based in Antigua or Panama or wherever the location, the regulators are going to come down. There is no running. Anyone operating an unregulated derivatives exchanges, I don’t care why they are, it’s a binary risk.”
Trading with leverage has become a very popular way to trade in the past few years. Risk-takers became quite interested in trying their luck and skill, but they can rarely do it on regulated platforms, at least to an extent they are interested in.
Regulated vs unregulated platforms: Which ones will dominate?
Kelly, however, does not agree with it. He said that these exchanges will go down sooner or later, and when they do, they will take their clients with them. When it happens, it will ruin the 100x leverage ecosystem. He concluded by calling it all a ‘complete nonsense.’
While his concerns do make sense, historically, it was unregulated platforms that attracted all the volume. Even so, the fact that regulated platforms are now starting to work with crypto is more than enough to start attracting many to them. Traders are currently torn between high leverage and high earnings and security of regulated platforms, and judging by the recent figures, it seems that regulated platforms are beginning to catch up to more loose unregulated ones.