CME Launches Bitcoin Volatility Futures With Monarq, DV Chain Block Trades
In brief
- CME bitcoin volatility futures (BVX) launched last week, tracking 4-week price turbulence expectations.
- Monarq Asset Management and DV Chain executed the first block trades in the new contracts.
- Volatility futures enable traders to bet on price movement magnitude independent of direction.
A New Tool for Volatility Traders
Most derivatives—futures, perpetual futures, options—require traders to pick a direction. They force a bet on whether price goes up or down. Volatility futures eliminate that complexity, letting traders express a view purely on how bitcoin will move in either direction.
The distinction matters. A trader convinced bitcoin will swing hard in the next month doesn't need to guess which way. They can take a position directly on expected price turbulence instead.
Monarq and DV Chain Lead the Way
Monarq Asset Management is an institutional-focused quantitative and systematic digital asset investment firm managed by former executives from LedgerPrime, Tower Research, and BlockTower Capital. DV Chain is a liquidity and market-making service provider that specializes in crypto markets.
Their debut trades signal institutional appetite for volatility instruments. Both firms have the infrastructure and capital to move markets.
CME's Crypto Momentum Builds
CME's crypto derivatives business has reached roughly 266,900 contracts year-to-date, up 38% year-on-year. Average daily open interest stands at roughly 274,500 contracts, up 18%.
The volatility futures launch expands CME's existing suite of bitcoin and ether standard and micro futures and options contracts. As institutional adoption accelerates, the exchange keeps building out tools for sophisticated traders to manage risk and express nuanced market views.
"As bitcoin continues to mature into a more mainstream institutional asset class, the demand for sophisticated risk management instruments grows alongside it. Robust tools like CME Group Bitcoin Volatility futures are exactly what investors need to accurately express their market viewpoints and efficiently hedge their portfolios within a secure, transparent framework." — Shiliang Tang, CEO of Monarq Asset Management
