UK-based CF Benchmarks has announced the launch of its Bitcoin BTC
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The FCA-regulated company’s new product is comprised of two indices, the CF Bitcoin Volatility Real Time Index (BVX) and the CF Bitcoin Volatility Index Settlement Rate (BVXS). These indices aggregate the implied volatility of Bitcoin options contracts listed on the Chicago Mercantile Exchange, CME, into a single value to assess market volatility and uncertainty.
“Volatility indices have become a key indicator in financial markets, providing participants with a way to gauge investor sentiment and risk appetite,” said Sui Chung, CEO of CF Benchmarks.
Real-time tracking of Bitcoin volatility
The BVX Index prints approximately every second to provide real-time Bitcoin volatility, while the BVXS Index calculates the daily settlement rate based on a 30-minute window of BVX observations between 3:30 p.m. 4:00 p.m. London time.
“The 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,” Chung added.
According to CF Benchmarks, the new volatility index can be used as risk sentiment data or as a settlement mechanism for a range of products so that market participants can trade volatility, and is compliant with the UK Benchmarks Regulation (BMR) .
“Cryptocurrency market participants need to be able to trade the volatility of cryptocurrencies, just as they can in other asset classes,” said Thomas Erdosi, head of product at CF Benchmarks. He added that it also allows participants to gauge market sentiment.
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