The Bitcoin Volatility Index, which would make it easier to track and trade 30-day forward-looking BTC price swings, was launched by CF Benchmarks.
There are two approaches to investigating the Bitcoin Volatility Index of CF Benchmarks. It might be used as a risk settlement database. Furthermore, it might function as a means of settlement for various items, guaranteeing that market players can trade volatility.
This Bitcoin Volatility Index, like all CF Benchmarks, complies with UK BMR regulations by design. Additionally, it is computed using a strict technique.
This implies that “products benchmarked against it can reliably track the underlying without being impacted by unaccountable price swings caused by poor quality data,” per a published statement.
The CF Bitcoin Volatility Real Time Index (BVX) and the CF Bitcoin Volatility Index Settlement Rate (BVXS) are two of the recently released indices. Significantly, with an emphasis on measuring market volatility and uncertainty, these indices combine imply volatility from BTC options contracts issued on the Chicago Mercantile Exchange (CME) into a single figure.
The BVX is the most active of the two indices, with real-time volatility available virtually every second. In contrast, BVXS uses a 30-minute window of BVX observations between 15:30 and 16:00 London time to determine a daily settlement rate.
Sui Chung, the CEO of CF Benchmarks, explained how volatility indices—particularly those that provide participants with a way to gauge investor sentiment and risk appetite—have become important indicators in the financial ecosystem. Chung added:
“As the largest cryptocurrency index provider by Assets under Reference (AuR), CF Benchmarks’ Bitcoin Volatility Index will be the benchmark for bitcoin price volatility, just as the Bitcoin Reference Rate (BRR) is the benchmark for spot bitcoin”
The US Securities and Exchange Commission (SEC)-approved spot Bitcoin ETF is one of the main crypto products that has successfully tracked the price of Bitcoin over the past three months.
The new product created much hype, and as a result, Bitcoin values increased to all-time highs (ATHs) exceeding $75,000. In general, investors in many jurisdictions are becoming more interested in the flagship cryptocurrency. In the near future, more functional indices will probably develop and gain traction due to this widespread acceptance and acknowledgment.
