Bibox, one of the leading encrypted digital asset exchanges based in Estonia, is said to launch perpetual trading contracts for bitcoin cash and Litecoin leveraged up to 50x, on April 12. The perpetual contracts that would be priced in Tether, USDT the stable coin pegged in US dollar, targets retail and Institutional investors.
Perpetual, unlike futures, does not expire and often seen as a better hedge from price drops. Still, perpetual contracts pose an agreement to buy an asset, which in this instance is bitcoin cash, at a pre-determined price.
Typically, depending on the market conditions investors pay a funding rate for the contracts every eight hours. Every so often users on long positions receive or pay those who are short and the other way around. The contracts would cost less for their investors as it does not have a funding rate, according to the spokeswoman for Bibox, Bihui Lin.
EOS, BTC, ETH Perpetual Contracts
Bibox at present has perpetual open for EOS, BTC, and ETH which are all paired to USDT. Last Monday, the trading volume for the contracts had already reached to 459 million USDT. Lin also stated that the bitcoin cash contracts would be purchased or sold depending on the weighted-average spot price of exchanges including Binance, Huobi, Bitfinex, Okex, and Bibox.
Bibox chose to trade contracts against tether because stablecoin is at the moment the most liquid and highest volume asset in the market. The USDT margin is simpler and more transparent. It makes it easier for users to calculate for loss or profit.