Bitcoin exchange Bitfinex has listed SegWit2x chain split tokens to allow traders to speculate on the future outcome of the proposed November hard fork that will likely split the bitcoin network into two competing blockchains.
According to the announcement, traders will be able to create chain split tokens– dubbed BT1 for the original chain and BT2 for the SegWit2x chain — by depositing BTC into the token manager.
“Upon creation, the BTC will be debited from your account and an equivalent amount of BT1 and BT2 will be credited. Users will also be able to reverse this process at any time, trading in equal numbers of BT1 and BT2 to extract BTC,” the announcement says.
BT1 and BT2 tokens trade against both BTC and USD pairs, and the exchange may add financing if there is sufficient liquidity. This allows traders to bet on which chain will emerge victorious following the fork, as well as whether the chain split will occur at all.
If and when the fork occurs, Bitfinex will convert the BT1 tokens into BTC and the BT2 tokens into B2X. If a fork does not occur by December 31, the contract period will expire; BT1 tokens will be converted into BTC and BT2 tokens will be destroyed.
Bitfinex had previously issued chain split tokens in March ahead of the potential Bitcoin Unlimited fork.
The announcement was met with a generally positive reception. “I love it!,” Blockchain Capital head of research Spencer Bogart tweeted, although he cautioned that the market would need to attract a “lot of volume to draw any meaningful conclusions” about the fair market post-fork prices of BTC and B2X.
imo the @ViaBTC market indicated that even with small volumes, the market can come up with a meaningful valuation
— Tuur Demeester (@TuurDemeester) October 6, 2017
Trader and analyst Tuur Demeester, however, believes that “the market can come up with a meaningful valuation” even if volume remains low. He pointed to ViaBTC’s bitcoin cash futures market, which generally traded in line with the post-fork value of BCH despite limited liquidity.
At the time of writing, BT1 tokens were trading at $3,250, while BT2 were priced at $1,104