A brand new product by crypto change Binance will quickly permit merchants to guess on Bitcoin’s growing or lowering share of the crypto market, it mentioned in a release right now.
#Binance Futures Will Launch USDⓈ-M BTCDOM Perpetual Contracts with As much as 25X Leverage
— Binance (@binance) June 17, 2021
Provided beneath the ‘BTCDOM’ ticker, the product is a cryptocurrency value index that displays the market dominance efficiency of Bitcoin by evaluating the asset to the highest 20 cryptocurrencies on Binance by market capitalization (excluding stablecoins).
“The BTCDOM Index is a metric that merchants can use to rapidly get a way of Bitcoin’s worth relative to that of the broader cryptocurrency market,” mentioned Binance within the submit.
Bitcoin’s dominance is a measure of the asset’s market share relative to different cryptocurrencies.
It, because the picture beneath reveals, accounted for as excessive as 93% of the complete crypto market in 2013, fell to its lowest 33% in January 2018, recovered to over 69% in 2020, and has since fallen to 43% as of right now. (Word: This chart compares Bitcoin to all different cryptocurrencies whereas BTCDOM is relative to simply 20. Figures could therefore range.)
Bitcoin dominance and makes use of
BTCDOM can be a ‘perpetual’ contract, a time period for a futures product with no expiry date. It is going to be Tether margin (use USDT as collateral) and merchants can have entry to 25x leverage.
As per Binance, the BTCDOM Index offers insights into the market and can be utilized as a device to invest on Bitcoin’s relative power in opposition to different cryptocurrencies.
For merchants, this may permit them to make a macro guess on the crypto market if altcoins achieve market share relative to Bitcoin (the index will lose worth). Vice versa, if altcoins lose market share relative to Bitcoin, the index will achieve worth and merchants will be capable of squeeze out a revenue (or hedge their bets).
Nevertheless, the index is unlikely to alternate between gaining worth and dropping worth. “In sure circumstances, if Bitcoin falls in value, however the remainder of the cryptocurrency market falls at the same fee, then Bitcoin dominance is more likely to stay the identical,” Binance defined.
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