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$580M of Open Interest Renders Cardano (ADA) The Third Largest Futures Market

By Jamie - Cryptocurrency Specialist

Open interest for ADA futures grew to $580 million, turning Litecoin (LTC) into the third-largest options derivatives market.

On Feb. 3, ADA carried out a hard fork and successfully Implemented the Mary update to the Testnet, converting the blockchain into a multi-asset network, much like Ethereum. This case appears to be one of the factors behind the remarkable 475% ADA surge in price and has been creating unforeseen ripples in the derivatives markets.

ADA's $81 million gross open interest futures has risen to the present $580 million and became the third-largest options market after Bitcoin (BTC) and Ether (ETH) with the potential to be the next most popular cryptocurrency on the market. Data suggests that this was not just a technological change, since Cardano's on-line and trading metrics greatly outperform Litecoin's.

Volume is the first and only predictor of market interest. Regardless of the market fluctuations, low trading volume represents a limited consumer base or lack of new players, which could be highly troublesome for investing in cryptocurrency as an emerging asset class.

A week earlier, LTC led ADA's open interest rate by 50 percent or more. That all changed when Litecoin's aggregate futures position was cut by 40%. Despite suffering a comparable price correction to Litecoin's 30% between Feb. 20 and 22, ADA had $125 million in long contract liquidations, about 19% of open interest at the time.

While beginning from a much lower base three months earlier, ADA's trading volume surged in February, although LTC was unable to reach the $2 billion average daily level.

Cardano, as a cryptocurrency trading network, has its on-chain metrics that offer an insight into its increasing usage and ADA's growing open interest. Data reveals that, until November 2019, both networks shared a common degree of transfer and purchase volume. By mid-2020, Cardano took the lead and had 10 times more on-chain operations.

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