Cryptocurrency traders that want to benefit from the infamous market volatility would be able to do so by taking advantage of COTI’s recently launched Crypto Volatility Index (CVI). Users will be able to place positions in anticipation of significant fluctuations in either direction.

The First Decentralized Crypto Volatility Index

COTI is a blockchain project that describes itself as a “fully encompassing finance” on the distributed ledger technology. It’s designed to meet and address challenges of traditional finance, such as fees, latency, global inclusion, and risk.

The project referred to traditional finance as well with its latest product – the Crypto Volatility Index. COTI said in a press release shared with CryptoPotato that CVI is inspired by the stock market’s Volatility Index.

CVI is already live on the mainnet, and users who want to participate can deposit Tether (USDT) to open positions or provide liquidity.

“The index enables traders to profit from market volatility by opening positions in anticipation of major movements in either direction. Users who expect volatility to increase can open a CVI position. If correct, they can take profit by selling their positions once the index has risen.”

The index will work in the opposite direction as well. If traders believe that the volatility will remain low, they can provide liquidity to the platform and profit by collecting fees paid by traders who have opened CVI positions.

The announcement further described the index as a “full-scale decentralized ecosystem that brings the popular ‘market fear index’ to the crypto market.”

Updates, Staking, And Liquidity Providing

COTI noted that users will also be able to connect the CVI index with their MetaMask or Trust Wallet accounts to manage their positions, provide liquidity, and deposit/withdraw funds.

Those who decide to provide liquidity need to deposit USDT for a minimum of 72 hours before receiving a share of the premiums collected by the pool. On the other hand, traders who have opened a position must maintain it for at least six hours before selling or closing it.

The index will work with its own native governance token called GOVI. The platform will enable users to stake the coin to earn fees and participate in voting. Token holders will also have a saying in determining which tradable assets are available on CVI, the allowed leverage, deposit amounts, and platform fees.

Future updates to the index include adding ETH and COTI as deposit tokens, more derivatives markets data sources, an advanced traders dashboard, margin trading, and an enhanced voting platform.

Trading above $35,000, Bitcoin continues to pass milestone after milestone as reports show that the cryptocurrency received the most capital inflow this month compared to tech stocks and traditional investments. 

Long Bitcoin Wins Most Crowded Trade

A recent survey conducted by the Bank of America on fund managers with over $500 billion in AUM reveals that investors are bullish on Bitcoin’s price in the long term. 

The study shows that “long bitcoin” dethroned “long tech” as the most crowded trade in January 2021. 

Reuters reported Tuesday that this is the first time a long position on technology companies is losing the top spot since October. This is also the first time “long bitcoin” has ever ranked first in the financial markets. 

The milestone is coming just three months after less than 5% of the participants in November’s survey voted for “long bitcoin” as a preferred trade, with more than 65% of fund managers choosing “long tech.” 

A previous survey conducted by BofA showed that “long bitcoin” climbed up to the top three preferred trades in December as fund managers named it as the “third-most crowded” trade.

Shorting USD

While investors are bullish on Bitcoin, traders are still losing faith in the US dollar as they continue to bet against it. The survey places “short USD” as the third most crowded trade for the month, just one spot below its previous position. It was the second-most crowded trade in December. 

As reported earlier, one reason for the criticism against the US dollar is the FED’s money printing spree during the peak of the COVID-19 pandemic last year, which allegedly saw the creation of almost 20% of all existing USD. 

Investors argue that the FED’s action is a recipe for inflation, with many economists predicting that the USD value would fall. To protect themselves against the supposed impending dollar doom, investors and institutions seeking to preserve their wealth chose Bitcoin, which has turned out to be a win for them so far.