CME is letting traders bet on bitcoin volatility, not price, and two firms have already placed bets
Key takeaways
- DV Chain and Monarq Asset Management executed the first block trades, kicking off trading in the contracts.
- These volatility contracts track the CME CF Bitcoin Volatility Index (BVX), which represents the market's expectations for bitcoin volatility over four weeks.
- That distinction matters because most derivatives, including futures, perpetual futures and options, require a view on where price is going.
The new contracts let investors trade and hedge volatility itself, rather than bitcoin’s price direction, enabling strategies around events such as U.S. inflation data releases.CME’s bitcoin BTC$62,945.93 volatility index futures began trading last week, offering investors a new way to trade and hedge price volatility. DV Chain and Monarq Asset Management executed the first block trades, kicking off trading in the contracts.
These volatility contracts track the CME CF Bitcoin Volatility Index (BVX), which represents the market's expectations for bitcoin volatility over four weeks. Their debut allows traders to take positions directly on expected price turbulence rather than just price direction.
That distinction matters because most derivatives, including futures, perpetual futures and options, require a view on where price is going. Volatility futures eliminate that complexity, letting traders express a view purely on how BTC will move in either direction.