Kraken, one of the world’s top crypto exchanges, has officially launched crypto derivatives trading in the UK. This move underscores the platform’s strategic pivot towards institutional and professional traders. This launch comes under the UK’s Financial Conduct Authority (FCA) framework, which permits derivatives trading for clients who meet its strict “Professional Client” classification.

The launch of Kraken derivatives trading in the UK aligns with the platform’s broader mission to deliver advanced, regulated financial instruments, especially as open interest in crypto derivatives surpassed $40 billion for the first time in 2024.

What Are Crypto Derivatives and Why Do They Matter?

Crypto derivatives are financial contracts whose value is linked to underlying digital assets like Bitcoin, Ethereum, or other cryptocurrencies. These instruments include futures, options, and perpetual contracts, allowing traders to speculate on price movements without holding the actual assets.

One of the main advantages of derivatives is leverage, which enables traders to amplify their exposure using a fraction of the required capital. This makes it possible to increase potential profits, though it also increases the risk.

Derivatives are also popular for hedging, allowing investors to protect themselves from adverse price swings in their spot holdings. Moreover, advanced traders often use market-neutral…