Investors can now trade on the implied volatility of Ether, another asset class, and Bitcoin using Bitfinex Derivatives.

Exchange of cryptocurrencies In reaction to a surge in volatility in the cryptocurrency markets, Bitfinex is offering new Bitcoin BTC trading tools at $65,916 as well as Ether ETH $3,320 futures on volatility.

Two new perpetual futures contracts are now being traded on Bitfinex's derivatives platform Bitfinex Derivatives, which is powered by iFinex Financial. The company made this announcement to Cointelegraph on April 3.

The Ethereum Implied Volatility Index (EVIV), the Bitcoin Implied Volatility Index (BVIV), and the Volmex Implied Volatility indices serve as the foundation for the new contracts. The 30-day expected volatility or the implied volatility of Bitcoin and Ethereum options contracts is tracked by the indexes.

“The creation of these indices allows our customers to not only monitor but actually trade the implied volatility of Bitcoin and Ether in a simple perpetual format,” Bitfinex’s head of derivatives, Jag Kooner, told Cointelegraph.

Perpetual futures, also known as perpetual swaps or perpetuals, are a type of derivative contract that allows traders to speculate on the future price of an asset without an expiration date.

According to Kooner, perpetual futures make the “most tradable format in the crypto space,” as other contracts rely on a dated structure. He noted:

"The product is accessible to both retail and institutional investors due to its ability to track the 30-day implied volatility in Bitcoin and Ether options contracts without requiring rolling, also known as dated futures."

The new contracts join the more than 60 perpetual futures contracts that are offered on Bitfinex, covering equities, foreign exchange, commodities like precious metals and oil, and cryptocurrency. Kooner said,

"We will be able to add implied volatility as another asset class with these new contracts."

Implied volatility is a measure used in options trading that shows how much the market anticipates an asset's value to fluctuate over a given time frame.

Volatility increases when investors anticipate significant movement, while it decreases when they anticipate that an asset's price movement will be restrained.

According to Kooner, the introduction of the new trading tools was a reaction to the values of cryptocurrencies reaching all-time highs. He mentioned:

"These indexes are more useful than ever because there is a chance of significant drawdowns and increased volatility, especially with many cryptocurrency prices hitting new all-time highs."

The news comes after cryptocurrency volatility broke all-time highs in March 2024. The Crypto Volatility Index (CVI), which tracks 30-day future volatility and serves as a “market fear index” to the crypto market, topped at 85 points on March 11.

Just two days before to Bitcoin's historic highs above $73,000 on March 13, the CVI touched its all-time high. As of this writing, the implied cryptocurrency volatility, as determined by the CVI, is approximately 76.