Bitfinex Launches First Volatility-Based Bitcoin and Ethereum Futures Contracts

cryptonews.com:

Bitfinex Derivatives, the derivatives platform of iFinex Financial Technologies Limited, is expanding its offerings with the launch of two new volatility-focused perpetual futures contracts. These contracts, the Bitcoin Implied Volatility Index (BVIVF0:USTF0) and the Ethereum Implied Volatility Index (EVIVF0:USTF0), aim to capture the market’s sentiment regarding future price movements for the two leading cryptocurrencies.

Unlike traditional futures contracts that track the underlying asset’s price directly, these new contracts focus on implied volatility, a metric derived from options pricing. Implied volatility reflects the market’s expectation of how much an asset’s price will fluctuate within a given timeframe. In simpler terms, the BVIV and EVIV contracts allow traders to speculate on whether market participants anticipate significant price swings (high volatility) or relative stability (low volatility) for Bitcoin and Ether in the coming weeks.

The contracts leverage the Volmex Implied Volatility indices, which track the 30-day expected volatility for these cryptocurrencies. This allows traders to gain exposure to market sentiment without directly buying or selling Bitcoin or Ether.

Furthermore, Bitfinex Derivatives offers these contracts with up to 20x leverage, potentially magnifying profits (or losses) for experienced traders comfortable with such risk.

These new volatility indices provide traders with a novel way to gauge market sentiment and potentially profit from anticipated price movements in Bitcoin and Ether, the exchange noted in a press released shared with Cryptonews.

Volatility indexes are known to exhibit negative correlation with the underlying asset’s price. This means that when the price of Bitcoin or