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Bitfinex Launches First Volatility-Based Bitcoin and Ethereum Futures Contracts

Bitfinex Derivatives, the derivatives arm of iFinex Financial Technologies Limited, is broadening its product lineup by introducing two fresh perpetual futures contracts centered on volatility. These contracts, namely the Bitcoin Implied Volatility Index (BVIVF0:USTF0) and the Ethereum Implied Volatility Index (EVIVF0:USTF0), are designed to gauge the market sentiment regarding future price fluctuations for the two primary cryptocurrencies.

In contrast to conventional futures contracts linked directly to the underlying asset’s price, these novel contracts concentrate on implied volatility, a metric derived from options pricing. Implied volatility reflects the market’s anticipation of the extent to which an asset’s price will oscillate within a specified timeframe. In simpler terms, the BVIV and EVIV contracts enable traders to speculate on whether market participants foresee substantial price swings (high volatility) or relative stability (low volatility) for Bitcoin and Ether in the forthcoming weeks.

Bitcoin Ethereum Volatility Futures Contracts Offer up to 20x Leverage

Utilizing the Volmex Implied Volatility indices, these contracts track the 30-day expected volatility for Bitcoin and Ether, enabling traders to tap into market sentiment without direct exposure to the cryptocurrencies themselves.

Bitfinex Derivatives further enhances these offerings by providing leverage of up to 20x, potentially amplifying gains (or losses) for seasoned traders accustomed to such risk levels.

According to a press release shared with Cryptonews, these innovative volatility indices furnish traders with a unique avenue to assess market sentiment and potentially capitalize on anticipated price fluctuations in Bitcoin and Ether.

Volatility indices typically demonstrate a negative correlation with the underlying asset’s price. In other words, significant drops in the price of Bitcoin or Ether tend to coincide with increased volatility index readings, reflecting heightened market apprehension. Conversely, periods of price stability often correspond with subdued volatility levels. Additionally, unforeseen events with significant market impact can prompt sharp spikes in volatility indices.

Scheduled for launch on April 3rd, 2024, the BVIVF0:USTF0 and EVIVF0:USTF0 contracts will be available for trading on Bitfinex Derivatives. However, it’s important to note that as per the exchange’s terms of service, US customers are prohibited from holding a derivatives account on the crypto exchange.

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