- Binance has launched its new Bitcoin Dominance perpetual contract, BTCDOM
- The BTCDOM contract will have a maximum leverage of 25x and use Tether (USDT) as collateral
- BTCDOM is a cryptocurrency index comparing Bitcoin to the top 20 digital assets on Binance by market cap, excluding stablecoins
- The BTCDOM index is uncapped which means it can trade beyond the 0 – 100% range of the regular Bitcoin dominance
- Trading will commence on June 21st at 3:30 am UTC
The popular crypto exchange of Binance has announced that it will be launching a new perpetual that tracks Bitcoin’s dominance in the crypto market. The perpetual contract, known as Bitcoin Dominance (BTCDOM), is an index that measures the dominance performance of Bitcoin versus the top twenty digital assets on Binance. in terms of market capitalization. The index will exclude all stablecoins.
25x Max. Leverage, Tether (USDT) To Be Used as Collateral
The Bitcoin Dominance (BTCDOM) perpetual contract will have a maximum leverage of 25x and will use Tether (USDT) as collateral. Trading of the BTCDOM Perpetual contract will commence on the 21st of June at 3:30 am UTC.
Bitcoin Dominance (BTCDOM) is Uncapped
Unlike the more commonly known Bitcoin Dominance with a range of 0 to 100%, the BTCDOM index will be uncapped to make it more suitable for derivatives trading.
According to the team at Binance, the Bitcoin Dominance (BTCDOM) index will measure the demand for Bitcoin relative to the top 20 altcoins. When Bitcoin gains market share relative to the altcoins, BTCDOM will gain value. Conversely, when altcoins gain market share relative to Bitcoin, BTCDOM will lose value.
In the situation where Bitcoin and the top 20 cryptocurrencies either drop or rise in value at the same rate, BTCDOM will remain the same.
Weekly Rebalancing of BTCDOM and Special Adjustments
The BTCDOM index will be calculated using the weighted average prices of its constituents and will be rebalanced weekly to capture the current market conditions.
In the case where one constituent of the index faces drastic market conditions such as a delisting or a drop in trade volume, Binance will perform a special adjustment by either excluding the affected digital asset or recalculating its weight in the index.