Bitfinex, the cryptocurrency exchange derivatives platform, is launching a new perpetual swaps product that allows traders to speculate over Bitcoin (BTC) dominance.
Dominance, which refers to the share of Bitcoin’s total market capitalization for all cryptocurrencies, is a measure closely watched by many in the community — whether they’re altcoin developers and traders or Bitcoin diehard maximalists.
BTC dominance is close to 67 percent as of May 5, according to Coin360 data.
The Bitcoin Dominance Perpetual Swap (BTCDOM) of Bitfinex Derivatives is apparently the first such contract to be launched onto the market. The exchange claims that it is “more efficient capital and cost-effective than an outright long or short futures trade, yet less volatile.”
The latter argument is persuasive, given that the share of Bitcoin’s total market capitalization of the cryptocurrency has varied relatively less than its spot market price. BTC dominance was slightly below 58 per cent a year ago and has remained range-bound between 60–70 per cent since the end of June 2019 — with one notable flash exception on March 12, 2020.
A Bitfinex representative said:
“Bitcoin has proven time and time again to be a safe haven for traders and it is continuing to be seen as digital gold. Since global markets crashed in March as the COVID-19 crisis took hold, we have seen a huge increase in trading volume, reaching over $2B over a 24-hour period during the crash on March 13th. We believe the demand will still be there after the halving whilst the supply will be halved.”
As reported last month, Bitfinex has launched its own social network, “Bitfinex Pulse,” to encourage traders to communicate.
While at the beginning of this year its parent company, iFinex, received a class action lawsuit for alleged market manipulation, the exchange continued to expand its offerings, unveiling staking services at the beginning of April.