![Crypto Terms Glossary: What is Derivative? Crypto Terms Glossary: What is Derivative?](/img/147/443/what-is-derivative-sm.webp)
A derivative is a financial contract that derives its value from the underlying traits of an asset, index, or interest rate. Futures and options contracts are examples of derivatives. There are a variety of blockchain-enabled cryptocurrency derivatives, including synthetic cryptocurrencies and bitcoin futures, which represent agreements to trade bitcoin (BTC) at a future date at a predetermined price.