How is the volatility index (VIX) measured in the cryptocurrency market?

3 answers

• Dec 16, 2021 · 3 years ago
  The volatility index (VIX) in the cryptocurrency market is calculated using a combination of historical price data and options pricing. It takes into consideration the implied volatility of various cryptocurrency options contracts. The VIX is derived from the prices of these options and reflects the market's expectations of future volatility. It is often used as a measure of investor sentiment and market risk. The higher the VIX, the higher the expected volatility in the cryptocurrency market.
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• Dec 16, 2021 · 3 years ago
  Calculating the volatility index (VIX) in the cryptocurrency market involves analyzing the price movements of a selected basket of cryptocurrencies. This basket is usually composed of the most liquid and widely traded cryptocurrencies. The VIX is calculated based on the standard deviation of the logarithmic returns of these cryptocurrencies over a specific time period. The higher the VIX, the higher the level of volatility in the cryptocurrency market.
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• Dec 16, 2021 · 3 years ago
  In the cryptocurrency market, the volatility index (VIX) is not as widely used as in traditional financial markets. However, some platforms like BYDFi offer their own volatility indexes based on the price movements of specific cryptocurrencies. These indexes are calculated using proprietary algorithms that take into account factors such as trading volume, price fluctuations, and market depth. The BYDFi volatility index provides traders with a snapshot of the overall market volatility and can be used as a tool for risk management and trading strategies.
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