Digital asset exchange Bitfinex has recently introduced perpetual futures contracts linked to the volatility of Bitcoin (BTC) and Ethereum (ETH). These futures simplify participation in market fluctuations for retail investors, avoiding the need for complex trading strategies during volatile events.
Perpetual futures contracts are unique in that they typically trade at prices close to an asset’s underlying value and do not have an expiration date. This new offering from Bitfinex will help traders navigate events that can cause price changes and allow retail investors to benefit from market fluctuations without the need for intricate strategies.
The volatility futures introduced by Bitfinex are based on Volmex’s Bitcoin and Ether implied volatility indices, known as BVIV and EVIV respectively. These indices, similar to the traditional financial market’s VIX index, track the expected price volatility over the next 30 days.
Jag Kooner, head of derivatives at Bitfinex, emphasized the utility of these indexes in the current market environment, stating, “With many crypto prices reaching new all-time highs, the likelihood of increased volatility and significant drawdowns means there is more utility for these indexes than ever.”
Bitfinex’s announcement on April 3 highlighted the launch of these futures under the ticker symbols BVIVF0:USTFO and EVIVFO:USTFO, with all contracts denominated, margined, and settled in Tether (USDT), the leading dollar-pegged stablecoin.
This launch comes in response to the growing interest in crypto volatility as a tradable asset class and follows in the footsteps of Deribit, a crypto derivatives exchange that introduced Bitcoin volatility trading contracts in March 2023.
By offering the ability to speculate on or hedge against the volatility of BTC and ETH, Bitfinex is not only expanding the tools available to traders but also enhancing the depth of the crypto derivatives market. This move is expected to provide more opportunities for investors to engage with the crypto market in a simplified and efficient manner.
