CF Benchmarks has recently launched the Bitcoin Volatility Index, a tool that tracks the price variations of Bitcoin in real-time. This new index will enable traders and investors to monitor and trade Bitcoin’s price fluctuations more efficiently.

The Bitcoin Volatility Index by CF Benchmarks has two primary uses. First, it can serve as a database for risk management purposes, allowing market participants to track and settle Bitcoin-related risks. Second, it can act as a settlement mechanism for various financial products, enabling traders to bet on Bitcoin’s volatility.

This new index is designed to comply with the UK BMR regulations, ensuring its reliability and accuracy. With a rigorous methodology, the index can provide a reliable measure of Bitcoin’s price volatility without being affected by erratic price swings caused by poor-quality data.

The CF Bitcoin Volatility Real Time Index (BVX) and the CF Bitcoin Volatility Index Settlement Rate (BVXS) are the two new indices launched by CF Benchmarks. These indices aggregate volatility from BTC options contracts listed on the Chicago Mercantile Exchange (CME) into a single value, focusing on measuring market volatility and uncertainty.

The BVX is active every second, providing real-time volatility data, while the BVXS calculates a daily settlement rate based on a 30-minute window of BVX observations between 15:30 and 16:00 London time.

Volatility indices are crucial in the financial ecosystem, providing a means to measure investor sentiment and risk appetite. The Bitcoin Volatility Index by CF Benchmarks is set to become the benchmark for Bitcoin price volatility, just as the Bitcoin Reference Rate (BRR) is the benchmark for spot Bitcoin.

Benchmarks and price trackers are essential for assets like Bitcoin to achieve full maturity. The recent approval of a spot Bitcoin ETF by the United States Securities and Exchange Commission (SEC) is a prime example of a crypto product that has effectively tracked Bitcoin's price. As the hype for the new product grew, Bitcoin's price reached new highs, demonstrating the importance of reliable price trackers in the crypto market.

With the increasing mainstream adoption and recognition of Bitcoin, the emergence and acceptance of other functional indices are likely in the near future.