Exchange of cryptographic currencies With the introduction of perpetual futures linked to the volatility indices of ether (ETH) and bitcoin (BTC), Bitfinex is enabling traders to wager on anticipated price volatility in the top cryptocurrencies.
The ether implied volatility index (EVIV) and the bitcoin implied volatility index (BVIV) of the decentralised derivatives platform Volmex serve as the foundation for the new futures.
These indices, which show the anticipated price volatility over a 30-day period, are produced from real-time call and put options for bitcoin and ether. The two indexes, according to Volmex, are comparable to the VIX index, Wall Street’s fear gauge, which is produced from the options market connected to the S&P 500 index.
The current press release states that users of Bitfinex can trade ether volatility futures and bitcoin futures starting on April 3 under the ticker symbols EVIVFO:USDTFO and BVIVF0:USTFO. The world’s biggest stablecoin, tether (USDT), is used to settle, margin, and denominate these contracts.
A funding rate mechanism helps maintain perpetuals’ prices in line with the underlying asset or index. Perpetuals are futures contracts that have no expiry date. According to volatility futures, Bitfinex users can now speculate on the speed at which the expected bullish or bearish price movement in ether and bitcoin will occur. If you gamble on an asset’s price to swing wildly in either direction, you are said to be long volatility.
Volatility futures are designed to assist traders in navigating binary events such as significant releases of U.S. economic data, Fed rate decisions, and events specific to cryptocurrencies. These events have the potential to create volatility in the market and provide access to sophisticated options strategies like straddles and strangles for retail investors who lack the capital or experience to take advantage of changes in implied volatility. A year after leading cryptocurrency options market Deribit introduced conventional futures contracts linked to its own bitcoin volatility index, DVOL, Bitfinex has launched a new product.