The cryptocurrency sector is one asset class that never sleeps, so it’s little surprise that last week was another busy one in the world of crypto and blockchain.
We look at some of the big crypto stories from the past week, including the launch of a new crypto volatility index from options firm Deribit, a ground-breaking blockchain-solar exchange initiative from Australia’s Victoria Bitter, and Coinbase tapping former US Securities and Exchange Commission (SEC) director, Brett Redfearn, as the firm’s new vice-president.
Deribit unveils Bitcoin Volatility Index
Deribit, the world’s largest crypto options exchange by trading volume, according to Coindesk, announced the launch of a Bitcoin Volatility Index [DVOL] last week, which it says takes “the pulse of bitcoin; the barometer of market volatility and sentiment.”
The Panama-based exchange, launched in 2016 by CEO John Jansen, said: “DVOL uses the implied volatility smile of the relevant expiries to output one number that gives a gauge of the 30-day annualised implied volatility.” Implied volatility refers to the market’s expectations for price turbulence over a specific period, in this case the next 30 days.
“DVOL uses the implied volatility smile of the relevant expiries to output one number that gives a gauge of the 30-day annualised implied volatility” – John Jansen
The index works in a similar way to the well-established Volatility Index [VIX] – often referred to as the “fear index” – which tracks the expected volatility of the S&P 500 index However, Deribit refers to its bitcoin volatility index as an “action gauge”, because “bitcoin options often have positive skew and the large moves are often expected on the upside as well as downside.”
Deribit plans to introduce futures on the bitcoin volatility index “soon”, which will enable traders “to take a position based on the market view on near-term volatility.”
Blockchain enables solar credit for beer swap programme
Last week also witnessed another first: Victoria Bitter’s (VB) new Solar Exchange programme, which “enables beer lovers to trade their excess solar energy for slabs of Victoria Bitter.” The innovative development in sustainability involves Japan’s Asahi Breweries [2502] (which acquired Carlton & United Breweries in 2020), plus Australia-based companies Diamond Energy, which specialises in renewable energy, and software technology firm Power Ledger.
“beer lovers [can] trade their excess solar energy for slabs of Victoria Bitter”
The programme is made possible by Power Ledger’s blockchain-powered software platform, which allows “users [to] trace the transactions of rooftop solar energy on a public ledger”, reports Coindesk. Participants can exchange credit on their power bill from generating excess solar at home — every $30 worth of credit can be exchanged for a case of Victoria Bitter, which is then delivered to the customer’s home.
The programme, which has 500 places available initially, is part of “Asahi’s ambitious sustainability agenda, which includes a commitment to be powered by 100% renewable electricity by 2025”.
Former SEC director Brett Redfearn joins Coinbase
Another notable development last week was crypto exchange Coinbase’s recruitment of the former US SEC’s Brett Redfearn, as vice-president of its capital markets division. Redfearn had headed the SEC’s trading and markets division until departing last year, reports the Wall Street Journal’s Paul Vigna.
Redfearn “will be responsible for defining and driving a vision and strategy to set the global standard for crypto capital markets, including digital asset securities and our crypto trading platform”, said Coinbase’s chief product officer Surojit Chatterjee, reports Coindesk.
Intriguingly, Redfearn’s previous role included enforcement actions against initial coin offerings from crypto start-ups. That experience will now benefit Coinbase ahead of its anticipated direct listing on the Nasdaq exchange, now confirmed for 14 April. “I appreciated the significant potential in this space if issuers, markets, and market participants could appropriately navigate the regulatory landscape. And that is something I can help make happen,” Redfearn said.
“I appreciated the significant potential in this space if issuers, markets, and market participants could appropriately navigate the regulatory landscape” – Brett Redfearn
Redfearn is clearly optimistic about the future of crypto, with various US regulatory developments “paving the way for greater opportunities for the crypto economy”, he said.
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