CF Benchmarks recently unveiled the Bitcoin Volatility Index to monitor BTC price fluctuations in real-time. This new index aims to aid in tracking and trading 30-day forward-looking BTC price movements.

The CF Benchmarks’ Bitcoin Volatility Index offers two main functions. It can be used as a database for risk settlement, and also as a mechanism for trading volatility for various products to ensure market participants can engage in volatility trading.

All CF Benchmarks products, including the Bitcoin Volatility Index, are compliant with UK BMR regulations and are calculated using a stringent methodology. This ensures that products benchmarked against it can accurately track underlying data without being impacted by unreliable price swings.

Two new indices have been launched by CF Benchmarks, namely the CF Bitcoin Volatility Real Time Index (BVX) and the CF Bitcoin Volatility Index Settlement Rate (BVXS). These indices provide a comprehensive measure of market volatility by combining data from BTC options contracts on the Chicago Mercantile Exchange into a single value.

The BVX index provides real-time volatility updates almost every second, while the BVXS calculates a daily settlement rate by using a 30-minute observation window from BVX between 15:30 and 16:00 London time.

CF Benchmarks’ CEO, Sui Chung, highlighted the importance of volatility indices in the financial sector as key indicators of investor sentiment and risk appetite. He mentioned that the Bitcoin Volatility Index will serve as a benchmark for tracking bitcoin price volatility, similar to the Bitcoin Reference Rate (BRR) which is used for spot bitcoin trading.

The approval of the spot Bitcoin ETF by the United States Securities and Exchange Commission (SEC) has paved the way for better tracking of Bitcoin prices. This has resulted in an increased interest in Bitcoin from investors globally, leading to price surges and new all-time highs.

As Bitcoin gains mainstream adoption and recognition, it is likely that the demand for more functional indices will arise in the future to meet the needs of investors in different regions.