Deribit to launch first bitcoin volatility index future on March 27

Deribit has said it will launch this month the industry’s first bitcoin volatility index future as bitcoin options volumes spiked this week over concerns about US banks.

Deribit, which trades futures and options on the main cryptocurrencies, said it will launch on March 27 a futures contract based on the Deribit Bitcoin Volatility Index (DVOL), the industry’s first bitcoin volatility index product.

The crypto exchange said the volatility index is a measure of the expected or implied volatility in bitcoin, offering traders another view of one of the world’s most actively traded markets.

John Jansen, chief executive of Deribit, said: “DVOL can indicate changes in the health and direction of the Bitcoin market, making it an essential tool for traders looking to stay ahead of the curve and a great baseline for volatility trading.”

DVOL is based on the implied volatility of various options traded on Deribit, providing a 30-day outlook on expected volatility, the exchange said.

Jansen added: “Deribit is always looking to bring new products to the market that offer traders new, transparent and secure methods to gain exposure to digital assets and best take advantage of market activity.”

The launch date emerged as the industry reported this week a spike in options volumes as traders reacted to the collapse of Silicon Valley Bank and concerns about other banks in the US and Europe.

Overall, the industry's options trading volumes surpassed on Tuesday 100,000 bitcoin, worth over $2.5 billion (£2bn), for the first time in almost two years.

The spike was linked by Deribit to heightened volatility around the collapse of SVB, leading investors to seek cover in the options market.

Deribit launched in August last year combinations, that is two related options trades in one order.

The market went live in May 2022 with options on Solana, meaning the cryptocurrency derivatives market was offering futures and options on three of the most popular digital currencies.

Crypto traders welcomed last month the UK government's plan to tighten the regulation of the cryptocurrency and digital assets markets, suggesting prudent oversight could yield much-needed clarity.