The Rise of the Fear Index and Bitcoin Volatility

02/22/2023 15:56 • AI Insights • 900 views

It is reported that the CBOE Volatility Index (VIX, commonly known as the fear index of Wall Street) of the Chicago Board of Options Exchange has jumped from 18 to 23 in the past three days, reaching the highest point in 2023. In contrast, the Bitcoin Volatility Index (BVIN), which measures the implied or expected volatility in the next 30 days, has recently stabilized, approaching the lower limit of the three-month range of 60 to 100. The implied volatility usually represents the degree of market uncertainty or anxiety. At the same time, the MOVE index, which measures the volatility of US treasury bond bonds, has jumped to a one month high of 120, ending the four month downward trend. The price of Bitcoin only evolved into a macro asset after a sharp decline in March 2020. After that, BVIN usually closely tracks the trend of VIX. The analysis shows that the conditions for Bitcoin to make a breakthrough in 2023 are mature. （coindesk）

CBOE Volatility Index of the Chicago Board of Options reached its highest point in 2023

Introduction

The CBOE Volatility Index (VIX) has recently jumped to its highest point in 2023, indicating that there is increasing uncertainty and anxiety in the market. However, the Bitcoin Volatility Index (BVIN) has remained stable, approaching the lower limit of its three-month range. This article will explore the recent rise of the fear index and the stability of Bitcoin’s volatility.

Background

The VIX is often referred to as the fear index of Wall Street because it measures the expected volatility in the S&P 500 over the next 30 days. It’s used as a gauge of the level of fear or stress in the market. When the VIX is high, it suggests that traders are worried about the stock market’s potential for large swings in price.
On the other hand, BVIN measures the implied or expected volatility in the next 30 days of Bitcoin. Since its price crash in 2020, BVIN has closely tracked the trend of VIX, which is an indication that the asset has matured as a macro asset. Additionally, the MOVE index, which measures the volatility of US treasury bond bonds, jumped to a one month high of 120, ending the four-month downward trend.

The Recent Increase in VIX

The recent spike in VIX reflects the uncertainty in the market as investors worry about the increasing inflation rate, rising interest rates and global supply shortages. The higher the VIX goes, the more likely the market will experience large price swings. The market has been volatile, and this is not expected to change anytime soon.

BVIN Stability

In contrast to the VIX, BVIN has remained stable for the past few months, with its volatility approaching the lower limit of the three-month range. This is an indication that there is less uncertainty in the cryptocurrency market. The stability of BVIN might be attributed to the fact that Bitcoin is now widely accepted as a means of payment by large corporations such as Tesla and PayPal, and governments are actively seeking ways to incorporate cryptocurrencies into their monetary systems.

Conclusion

In summary, there is currently an increase in uncertainty in the market as reflected by the rise of VIX. However, the stability of BVIN suggests that cryptocurrencies such as Bitcoin might have matured as macro assets. It’s important to note that the market remains volatile, and investors should take caution when investing in both traditional and crypto assets.

FAQs

1. What is the VIX?
The VIX is a measure of the expected volatility in the S&P 500 over the next 30 days. It’s often referred to as the fear index of Wall Street because it’s used as a gauge of the level of fear or stress in the market.
2. How does BVIN work?
BVIN measures the implied or expected volatility in the next 30 days of Bitcoin. It’s an indication of market uncertainty or anxiety. Since BVIN usually closely tracks the trend of VIX, it’s often used as a gauge of the level of fear or stress in the crypto market.
3. Should I invest in cryptocurrencies?
As with any investment, there are risks involved in trading cryptocurrencies. The market remains highly volatile, and investors should take caution when investing in both traditional and crypto assets. Do thorough research and seek professional advice before investing.

This article and pictures are from the Internet and do not represent aiwaka's position. If you infringe, please contact us to delete:https://www.aiwaka.com/2023/02/22/the-rise-of-the-fear-index-and-bitcoin-volatility/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.