21 April, 2024

Bitfinex Unveils Innovative Futures for Betting on Crypto Price Swings

03 Apr, 2024

04 Apr, 2024

  • Bitfinex introduces perpetual futures contracts for BTC and ETH volatility, pegged to BVIV and EVIV, enabling trading strategies.
  • Decentralized platform Volmex launches indices mirroring the VIX for the crypto market, providing tools to gauge BTC and ETH’s expected volatility.
  • Bitfinex offers perpetual futures for crypto volatility, settled in USDT, broadening access to advanced trading strategies without expiry.

Bitfinex, a leading cryptocurrency exchange, has rolled out perpetual futures contracts linked to Bitcoin (BTC) and Ethereum (ETH) volatility, marking a significant leap forward in crypto derivatives trading. These futures contracts are pegged to the Bitcoin implied volatility index (BVIV) and Ethereum implied volatility index (EVIV) and designed to forecast the price fluctuations of BTC and ETH over 30 days. 

A recent report stated that decentralized derivatives platform Volmex has developed indices that serve as an alternative to the traditional VIX index, which is also known as Wall Street’s “fear gauge”. These indices measure the expected volatility in the S&P 500 index, and now the crypto market has a similar tool.

Available to Bitfinex customers from April 3, these contracts trading under the ticker symbols BVIVF0:USTFO and EVIVF0:USDTFO are settled in Tether (USDT), the most prominent dollar-pegged stablecoin. Unlike traditional futures, these perpetual contracts have no expiration date and incorporate a funding rate mechanism to align the contract prices closely with the actual market prices of the underlying assets.

Source: TradingView

This new class of derivatives enables traders to speculate on the intensity and direction of the expected price movements in Bitcoin and Ether, providing a tool for investors to profit from both upward and downward market shifts potentially. Especially useful during periods of anticipated high market volatility, such as the release of critical economic data or specific crypto-centric events, these volatility futures open up new strategies for retail investors. Previously, such investors might not have had the means or expertise to engage in complex options strategies, like straddles or strangles, to capitalize on volatility predictions.

Bitfinex’s launch of these volatility futures follows a trend initiated by Deribit, a dominant force in crypto options trading, which introduced futures contracts based on its Bitcoin volatility index a year prior. With this innovation, Bitfinex aims to broaden the horizon for crypto traders, offering them sophisticated tools to navigate and profit from the market’s inherent volatility, cementing its position as a trailblazer in the expanding universe of cryptocurrency derivatives.



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