What Is the VIX Equivalent for Cryptocurrency Markets?
The VIX (Cboe Volatility Index) measures the expected 30-day volatility of the S&P 500. The crypto equivalent is typically an index that tracks the implied volatility of Bitcoin or Ethereum options, such as the BitVol Index (BVOL) or the Cboe Bitcoin Volatility Index (BVIX).
These indices use a similar methodology to the VIX, aggregating the implied volatilities of a range of near-term options to provide a single measure of market fear or complacency.
Glossar
Volatility Index
Measurement ⎊ The Volatility Index, within cryptocurrency derivatives, functions as a forward-looking gauge of market expectations for near-term price fluctuations, derived from options pricing.
Realized Volatility
Measurement ⎊ Realized volatility, within cryptocurrency and derivatives markets, represents the historical fluctuation of asset prices over a defined period, calculated using observed transaction data.
VIX Equivalent for Cryptocurrency
Equivalent ⎊ The VIX Equivalent for Cryptocurrency refers to a volatility index, such as the BitVol Index (BVOL), designed to replicate the methodology and function of the Cboe Volatility Index (VIX) but applied to a major digital asset like Bitcoin.
Implied Volatility
Expectation ⎊ This value represents the market's consensus forecast of future asset price fluctuation, derived by reversing option pricing models using current market premiums.
Cboe Bitcoin Volatility Index
Index ⎊ The Cboe Bitcoin Volatility Index, often ticker symbol XBT-VIX, is a specific, real-time measure designed to reflect the market's expectation of Bitcoin's 30-day volatility, calculated using a formula derived from the prices of a wide range of Bitcoin options listed on the Cboe exchange.
Bitvol Index
Benchmark ⎊ The Bitvol Index functions as a real-time benchmark designed to quantify the market's expectation of Bitcoin's future price volatility over a specific, standardized period, typically 30 days.