CF Benchmarks, headquartered in the UK, has revealed the rollout of its latest offering, the Bitcoin Volatility Index. This new product facilitates the monitoring and trading of bitcoin price volatility over a 30-day forward-looking period.
Comprising two indices, the CF Bitcoin Volatility Real Time Index (BVX) and the CF Bitcoin Volatility Index Settlement Rate (BVXS), the regulated firm aggregates implied volatility from bitcoin options contracts listed on the Chicago Mercantile Exchange (CME). These indices provide a consolidated value, offering insights into market volatility and uncertainty.
Sui Chung, CEO of CF Benchmarks, underscored the significance of volatility indices in financial markets, noting their role in measuring investor sentiment and risk appetite.
The BVX index delivers real-time updates of bitcoin volatility, with readings approximately every second. Meanwhile, the BVXS index calculates the daily settlement rate by analyzing a 30-minute window of BVX observations between 3:30 pm and 4:00 pm London time.
Chung further emphasized that CF Benchmarks’ Bitcoin Volatility Index is poised to become the industry benchmark for bitcoin price volatility, akin to the Bitcoin Reference Rate (BRR) for spot bitcoin.
According to CF Benchmarks, the new volatility index serves multiple purposes. It can function as risk sentiment data and serve as the settlement mechanism for various products, enabling market participants to engage in volatility trading. Importantly, it complies with the UK Benchmarks Regulation (BMR).
Thomas Erdosi, Head of Product at CF Benchmarks, highlighted the necessity for crypto market participants to access volatility trading akin to other asset classes. He added that the index provides valuable insights into market sentiment, empowering participants to make informed decisions.
