 ▲ Bitcoin (BTC) |
The Volatility Index, often referred to as Wall Street’s “fear gauge,” has now been introduced to Bitcoin (BTC), the leading cryptocurrency, marking a historic milestone that fully integrates the crypto market into the core arena of traditional finance.
According to Bitcoin.com News on March 9 (local time), the Chicago Board Options Exchange (CBOE) announced that it will officially launch BITVX, a new Bitcoin volatility index linked to options on the iShares Bitcoin Trust (IBIT) exchange-traded fund (ETF), on March 23.
BITVX applies the same methodology as the VIX index, Wall Street’s iconic gauge of expected volatility in the U.S. stock market. Rather than relying on historical price movements, it directly extracts implied volatility from options prices, providing an indicator of how much traders expect the market to fluctuate over the next 30 days.
To calculate the index, CBOE will utilize IBIT options that expire every Friday along with two maturities that cover a consistent 30-day period. By collecting data from out-of-the-money option strike prices, it derives a model-free estimate of pure short-term volatility expectations.
The selection of the iShares Bitcoin Trust (IBIT) as the underlying asset reflects the rapid rise of spot Bitcoin ETF-linked options as the most actively traded digital asset derivatives in the United States. This fully captures the explosive demand from institutional and retail investors seeking regulated exposure to Bitcoin within established financial markets.
Rob Hocking, Global Head of Product Innovation at CBOE, emphasized that the launch provides the market with a transparent, rules-based volatility benchmark. As Bitcoin moves beyond being merely an asset of institutional interest to having its own official volatility scoreboard, the digital asset derivatives market is expected to solidify its place within Wall Street’s established mainstream ecosystem.
Disclaimer: This article is for investment reference purposes only, and the publisher is not responsible for any investment losses incurred based on it. The information provided should be interpreted solely for informational purposes.