Profiting from Volatility with VegaX
Bitcoin price swings, not sure what to do? We’ve got you covered. Visit: https://vegaxholdings.com
The entire crypto world loves to trade. But they’re doing it without any tools for proper risk management. Recently, with the rise of DeFi, some of these tools are being made available to the cryptocurrency industry. Futures and options are in actuality just the beginning. There are various different things such as token sets that also represent an intriguing new concept with decentralized asset management being another topic that is top of mind for many in the field.
However, most of this research and activity has been exclusive to the Ethereum chain due to its widespread following and smart contract capactilities. None of the existing most prominent DeFi platforms even accommodate the most prominent cryptocurrency, Bitcoin, or any other blockchain chains. Sure, there are wallets and lending platforms out there that can accommodate multiple chains, but lending is the most basic DeFi function.
VegaX intends to change that oversight by offering unique innovative products with better accessibility and returns.
VegaX’s first few products will allow investors to benefit from and/or mitigate the volatility of cryptocurrency’s most liquid asset, bitcoin. Since the balance or imbalance of supply and demand are basically what determines the price of a cryptocurrency, extreme volatility is intrinsic to all cryptocurrency. The global bitcoin markets reflect that volatility and absorb it via the deepest order books of any asset in crypto. Sophisticated investors take advantage of that to make very attractive risk-adjusted returns. Now, with VegaX, retail investors can easily get exposure to these kinds of complex strategies!
VegaX has developed an index tied directly to Bitcoin volatility known as the Bitcoin Volatility Index (VBIX). In the 1990s, equities traders were looking for means to de-risk their portfolios. They turned to the work of Profs. Brenner and Galai to create a Volatility Index. Eventually, that index was turned into a product by the Chicago Board Options Exchange (CBOE) that represents the price of 30 days forward volatility of the S&P 500. This index has come to be known the “fear gauge” because its price movements provide the market with valuable information about the collective expectations of market traders.
Applying this methodology to cryptocurrencies, starting with its most important asset Bitcoin, could give crypto traders valuable tooling in managing their portfolios. Similar to the CBOE’s own volatility product, affectionately termed The VIX, the VBIX measures implied 30-day volatility derived from BTC options trading on Deribit and, eventually, other crypto derivatives exchanges. DARCwallet users will be able to invest in a tokenized VBIX product sometime this year.
Another investing service that VegaX will soon be providing holders of Bitcoin is our Enhanced Bitcoin Exposure (EBE) strategy. This strategy is intended to provide Bitcoin holders with current income and moderate downside protection by selling options based on the value of the total BTC contributed to the strategy. In traditional markets that trade the assets of mature industries, options pricing is relatively accurate. However, with digital assets, the industry is so new and volatility is currently so high that large premiums for these options are readily available on the market. The EBE takes advantage of these premiums to generate consistent income.
VegaX is also working on a tokenized version of this strategy which will also allow traders to create a secondary market for additional liquidity.
All of the BTC contributed to this strategy will be held in a mixture of secure cold custody solutions as well as third-party custodians, such as Bitgo, to provide maximum security and peace of mind to all EBE participants. Participants will be able to redeem the bitcoin contributed to the EBE service at any time, subject to the holding requirements of this particular strategy.
Another important step on the roadmap for VegaX is the launch of a decentralized platform which will permit the trading of tokenized products and others. We will base this development on open-source Cosmos Distributed Exchange technology. Again, users of DARCwallet will have direct access to the order books kept on this unique exchange platform.
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