Digital asset exchange Bitfinex has introduced perpetual futures contracts linked to the volatility of Bitcoin (BTC) and Ethereum (ETH).
What sets perpetual futures contracts apart is that trading usually occurs at prices close to an asset's underlying value, and they have an expiration date.
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The volatility futures will help traders handle events that can cause price changes and enable retail investors to benefit from market fluctuations without needing complex strategies.
These futures are introduced based on Volmex's Bitcoin and Ether implied volatility indices, known respectively as BVIV and EVIV. These indices, akin to the traditional financial market's VIX index—often called Wall Street's "fear gauge"—track the expected price volatility over the next 30 days.
Jag Kooner, head of derivatives at Bitfinex, said:
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 being denominated, margined, and settled in Tether (USDT), the leading dollar-pegged stablecoin.
The launch also responds to growing interest in crypto volatility as a tradable asset class. It 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.
