Bibox exchange announced the launch of Bitcoin Cash (BCH) and Litecoin (LTC) based leveraged perpetual contracts on the platform on April 12th 2019. The Estonian based exchange announced the perpetual contracts will be priced using Tether (USDT) – a US dollar pegged stablecoin – and will be released to both institutional and retail investors.
Bibox exchange is one of the leading cryptocurrency exchanges offering perpetual contracts for a number of digital assets. In addition to BCH and LTC, the exchange has open positions in Bitcoin (BTC), Ethereum (ETH) and Eos (EOS) perpetual contract priced in USDT. The perpetual contract are priced using weighted-average spot price from various exchanges including Binance, OKEx, Huobi, and Bitfinex.
Perpetual Contracts On BCH And LTC
The addition of BCH and LTC to the pool of perpetual contracts is a move welcomed by investors especially during times of a bear market. Perpetual contract are an agreement to buy an asset at a predetermined price but unlike futures, the perpetual contracts do not expire. This places the investor at an advantage when the prices are dropping and hedges their investment.
The advantage of the launched perpetual contracts is the lack of funding fees that are to be paid by either the shorts or longs on the perpetual contract. The funding fee is paid every 8 hours whereby when the Funding Rate is positive, longs pay shorts. When it is negative, shorts pay longs.
Bihui Lin, the spokeswoman for Bibox, spoke on the future plans of the exchange saying the new perpetual contracts are important for the ecological growth of the exchange. She further added that the exchange development team will continue providing their users with an efficient, secure, transparent and user-friendly environment to make trade efficient and cheap. She concluded saying,
“Also, during the bear market, derivatives are a good investment tool as an alternative for customers.”
Tether As The Base Currency For Perpetual Contracts
Bibox selected to use the USDT pair as the base for the contracts due to the ease to calculate profits and losses and the huge liquidity the market has. The exchange contract witnessed a $459 million USDT perpetual contracts traded in the last 24 hours on the three pairs.
The industry is growing as more exchanges and financial institutions continue to offer derivatives on cryptocurrency assets. The derivatives are important for both institutional and retail investors to hedge their profits and avoid mass losses on their investment which will ensure mature growth of the cryptocurrency industry.
Coinflex became the first exchange to offer physically delivered Bitcoin futures, a move that is being replicated by the Intercontinental Exchange Inc. and Chicago based Eris exchange.