- The launch of the Bitcoin Volatility Index by CF Benchmarks introduces a new standard for measuring bitcoin price volatility.
- The index is comprised of two components, the CF Bitcoin Volatility Real Time Index (BVX) and the CF Bitcoin Volatility Index Settlement Rate (BVXS), which aggregate implied volatility from bitcoin options contracts on the CME to provide a single value representing market volatility and uncertainty.
CF Benchmarks, a UK-based firm, has launched its Bitcoin Volatility Index, providing a new tool to track and trade future bitcoin price volatility. This innovative offering includes two indices: the CF Bitcoin Volatility Real Time Index (BVX) and the CF Bitcoin Volatility Index Settlement Rate (BVXS).
These indices aggregate implied volatility from bitcoin options contracts listed on the Chicago Mercantile Exchange (CME) into a single measure, allowing market participants to gauge bitcoin’s market volatility and uncertainty.
“Volatility indices have become a key indicator in financial markets, offering participants a way to assess investor sentiment and risk appetite,” explained CF Benchmarks CEO Sui Chung.
Real-Time Volatility Tracking
The BVX index provides real-time tracking of bitcoin volatility, updating approximately every second. The BVXS index calculates the daily settlement rate based on a 30-minute observation period of BVX data between 3:30 p.m. and 4:00 p.m. London time.
According to Chung, CF Benchmarks’ Bitcoin Volatility Index is positioned to become the benchmark for bitcoin price volatility, just as its Bitcoin Reference Rate (BRR) is the benchmark for spot bitcoin.
The new volatility index serves various purposes: it can be utilized as risk sentiment data, as the settlement mechanism for a range of products, and it adheres to the UK Benchmarks Regulation (BMR).
“Market participants in the crypto space need the ability to trade volatility just as they do in other asset classes,” stated CF Benchmarks Head of Product Thomas Erdosi. He emphasized that this offering not only facilitates trading but also aids in understanding market sentiment.
Advancing Market Insights
CF Benchmarks’ introduction of the Bitcoin Volatility Index marks a significant step forward in providing real-time tracking and trading of bitcoin price volatility. By offering market participants a valuable tool for assessing risk sentiment and gauging market uncertainty, the new index enhances the overall understanding of bitcoin’s dynamic market.
This innovation demonstrates CF Benchmarks’ commitment to advancing the crypto market’s efficiency and transparency.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
