In order to analyse the derivative market, first it had to be established what is required for such to succeed. A conceptual framework was developed based on similar cases of the past and scientific research, as there is no established theorem regarding cryptocurrencies. The framework has found three pillars that are a prerequisite for a derivative exchange to thrive, volatility, money at risk, and number of market participants. Hence, these three aspects were investigated

The measure for volatility was the standard deviation of the logarithmic returns. For money at risk, the value at risk and expected shortfall were selected. And as for the number of market participants, as this cannot be extracted easily, the focus was put on liquidity, or more precisely illiquidity. These were compared to two benchmarks. First, the Swiss Market Index as a representation of the Swiss market. Second, to Bitcoin before there were derivative products based on it in order see what values might be needed for an underlying to be traded on a derivative exchange.

This study found that, for the underlying, the return per percent of volatility is above the SMI for all cryptocurrencies but two. However, only two coins exceed the value of Bitcoin as the benchmark, Bitcoin and Ethereum. As for money at risk, all cryptocurrencies were above both benchmarks. None of the coins was found to be as liquid as the SMI, however, Bitcoin and Ether achieved a higher liquidity than Bitcoin as the benchmark. Thus, only Bitcoin and Ether were considered to be able to create a successful derivative exchange. This was supported by the findings that only Bitcoin currently has a derivative market in a globally connected financial system and Ether is being seriously considered. It has to be mentioned that there are currently other derivative products, mainly contracts for differences, for a range of cryptocurrencies. As those are only available through specialised platforms, they were neglected for this paper. As a consequence, the conceptual framework was judged to provide some added value to the discussion of what is needed to create a successful derivative trading, but should not be considered to be without fault.