Originally suggested back in 1993 by economist Robert Shiller and later popularized by the digital asset sector, perpetual futures are now being evaluated by traditional financial institutions on Wall Street for instruments like the Cboe Volatility Index, famously known as the stock market’s fear gauge.
As reported by Bloomberg, Cboe is currently examining perpetual futures for the VIX, though the initiative remains in its early phases with no official contract specifications or regulatory filings submitted yet.
The VIX Index tracks the expected 30-day volatility of the S&P 500 utilizing options pricing. Because market participants purchase options to shield their portfolios against sudden downward movements, buying interest for these instruments accelerates during market contractions, driving the index higher. Consequently, the VIX earned its reputation as Wall Street’s primary fear gauge.
The VIX already possesses an active derivatives ecosystem encompassing futures, options, and exchange-traded vehicles that follow the index. Nevertheless, traditional futures feature an expiration date, which is the point when agreements terminate and traders must rollover or transition their positions to subsequent available contracts. These periodic rollovers incur expenses and diminish overall performance, a major criticism levied against Bitcoin futures exchange-traded funds upon their launch in late 2021.
In contrast, perpetual swaps never reach maturity. Instead, they implement a funding fee mechanism to align the contract valuation with the spot index, theoretically granting investors the closest possible equivalent to trading the genuine VIX spot price directly.
“Traders don’t have to worry about expiries and decay and just focus on the direction of where they think the underlying is heading. The VIX is one of many more indexes, assets and metrics that will be perpified. We expect to see a strong wave of perp-ification to occur in the coming months,” Martin Lee, market insights lead at DWF Labs, told CoinDesk.
Certain digital asset platforms like Gate already provide VIX/USDT perpetual contracts, although this market suffers from low liquidity and minimal trading activity. Recently, Hyperliquid introduced futures linked to Bitcoin’s VIX counterpart, which is Volmex’s bitcoin implied volatility index.
An eventual rollout of VIX perpetual futures could attract a broader audience of participants to volatility markets. Enhanced participation from buyers and sellers, alongside robust risk management by market makers across VIX futures and complementary S&P 500 derivatives, might help align various VIX-related offerings more closely.
Despite these potential advantages, ongoing expenses remain present through periodic funding payments. Furthermore, the index fundamentally represents a mathematical formulation rather than a tangible physical asset like Bitcoin, presenting a unique hurdle for market makers who cannot simply acquire and dispose of the underlying spot asset to manage their exposure, unlike what market makers do in the BTC ecosystem.
“For us, the interesting question is how funding would anchor an index that cannot be bought as a cash asset. Removing expiry does not remove hedge costs or basis risk. Until contract terms exist, this is a potential new volatility market, not a cheaper substitute for options convexity,
Originally published at https://www.coindesk.com/daybook-us/2026/10/02/wall-street-s-fear-gauge-vix-could-get-a-crypto-style-makeover.
