Bitfinex expands beyond crypto, launches equity derivatives that settle in Tether

Crypto exchange Bitfinex has expanded beyond the digital asset space by launching equity index derivatives that settle in Tether (USDT) stablecoin.

The new derivatives — Europe 50 and Germany 30 perpetual swaps — offer exposure to traditional stock markets. Europe 50 represents the STOXX Europe 50 index covering 50 stocks from 18 European countries. Germany 30 represents the Deutscher Aktien Index (DAX) of the 30 largest German stocks that trade on the Frankfurt Stock Exchange.

This is the first time a crypto exchange has launched an equity product. "CME moved into crypto with bitcoin futures. Now Bitfinex is moving into conventional markets," Bitfinex CTO Paolo Ardoino told The Block.

Ardoino said Bitfinex wanted to broaden the investment universe and enable crypto traders to get exposure to traditional markets on a single platform. "High-frequency traders account for about 80% volume on our platform. We are attuned to their requirements and see this offering as being able to enhance cross-asset trading strategies," Ardoino told The Block.

Europe 50 and Germany 30 perpetual swaps offer up to 100x leverage. They settle in USDT and therefore helps reduce forex and interest rate risks, said Bitfinex. "The fact that settlement is in USDT is important as this makes trading seamless, efficient, and powers interesting plays between different asset classes," said Ardoino.

The new derivatives are available in select jurisdictions and only to "verified users." It means traders would be required to go through the due diligence process to verify and confirm their identity, source of funds, and banking relationships, Ardoino told The Block.

Bitfinex recently also launched a forex offering, i.e., euro, British pound, and Japanese yen perpetual contracts that settle in Tether.