Scalpex Crypto Derivatives Exchange is launching a new Bitcoin Dominance Perpetual Futures Contract (BTCDOM) based on CoinMarketCap’s Bitcoin dominance index, allowing trading movements of the Bitcoin (BTC) dominance.
Bitcoin dominance index
The Bitcoin dominance index shows its share of the cryptocurrency market capitalization. The index is calculated by dividing the Bitcoin capitalization by the total market capitalization of all crypto assets and multiplying it by 100%, and it also shows the current distribution of the cryptocurrency market capital. If the index goes down, investors may pay attention to altcoins, meaning they are ready for bigger risks. If altcoins are actively selling, investors buy Bitcoin, increasing their share in the total capitalization. Fear, uncertainty and doubt are growing in the market, and investors are fleeing risks and switching to a more “solid” cryptocurrency. The Bitcoin dominance index shows the current phase of the market and can predict reversals in global trends. At the time of the launch of BTCDOM futures on Scalpex, the share of Bitcoin in cryptocurrency capitalization was 41.6%.
BTCDOM futures contract
BTCDOM is a unique way to bet on the further movement of the Bitcoin dominance index, which is listed and can be traded here. It is less volatile than the price of Bitcoin and more prone to long, predictable trend movements. Since the beginning of 2021, the index has been steadily dropping from 70% to the current 40%, while the price of Bitcoin behaved overly volatile, liquidating both long and short positions.
“The Bitcoin dominance index is discussed in crypto chats as often as Elon Musk’s tweets. We could not help but notice that no one has fulfilled the need for futures on this index at a decent level yet. Our research helped create a simple and robust mechanism for forming the BTCDOM index similar to CoinMarketCap. We attracted liquidity and made everything as simple, efficient and convenient as possible so that traders can implement their trading ideas and strategies at a new level. Since the Bitcoin dominance index is a percentage, it cannot fall to zero, just like it cannot go over 100. The real range of index movements is even smaller, and judging by history, it ranges from 30% to 70%. This instrument is more exciting now, with a sharp decline in the index to the zone of historical minimum,” said Michael Shabounin, CEO of Scalpex.
The details regarding the contract can be found here.
History of Bitcoin dominance
Bitcoin took up 94% of the market in 2013. Neither Ethereum, Tether nor other ERC-20 projects were on the horizon, and this continued until 2017, which was when the season of altcoins began. This pushed Bitcoin by almost 10%, while Ether’s (ETH) share was 5.7%, and XRP held just over 1%. Subsequently, in less than six months, the initial coin offering boom for ERC-20 coins first increased the market capitalization of the entire industry by almost five times from $20 billion to $114 billion and then halved the share of Bitcoin to 40%. Some expected that Ether would overtake Bitcoin to become the top cryptocurrency, but this did not happen.
In January 2018, when Bitcoin’s dominance was 32.8%, the crypto winter began, and crypto entered a bear market. The alt season was over; investors lost money; and ICOs disappeared. Some ICO fever statistics include:
- 86% of ICOs fell below the listing price.
- 30% of altcoins have gone to zero.
- Only 29% of ICOs had at least a prototype.
The market had been cleared and revived by the fall of 2019 when Bitcoin’s dominance returned to 84.5%. The last high value of the index was recorded at the end of March 2021 at 80.91%, after which there is an almost sheer drop in the index to today’s 40%.
About Scalpex Exchange
Scalpex Exchange is a crypto derivatives exchange founded in August 2020. Scalpex’s trading fees are 0% for market makers and 0.03% for market takers. A flexible system of discounts and bonuses can further reduce the fees for professional intraday traders. Scalpex strives to expand and popularize the crypto derivatives market by promoting new UX approaches, 24/7 multilingual support, extremely fast order execution, tight spreads, and innovative trading instruments, such as decentralized finance liquidity provider perpetual futures and Bitcoin dominance index futures.
Scalpex offers direct trading perpetual futures contracts for top cryptocurrencies, unique perpetual futures contracts on liquidity tokens of three stable liquidity pools on Uniswap, unique direct perpetual Bitcoin dominance index futures (BTCDOM), and three spot contracts for BTC/USDT, ETH/USDT and internal ERC-20 token SXE/USDT. All futures can be traded with up to 100 times leverage.
Scalpex is registered in the British Virgin Islands and provides online trading services to individual retail and professional derivatives traders.
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