Defi Index CVX Measures Crypto 'Market Fear' and Implied Volatility  

Egon Muramansk Ilen

DeFi 2 years ago
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The decentralized finance (defi) platform has launched the beta version of its “Crypto Volatility Index”, otherwise known as the “CVX.” The CVX is an index similar to the “Market Fear Index” (VIX) commonly used in traditional finance, but measures the suggestive volatility from bitcoin and ethereum options markets.

It’s still early but a new product has been launched that may be able to give cryptocurrency traders a rough idea of how the crypto market is feeling and if traders expect future price fluctuations.

The new service is a beta product produced by the platform and the creators claim the application is a decentralized version of VIX. The VIX is commonly used in traditional finance markets because it allows traders to hedge or to take profit from market volatility.

Basically, the CBOE Volatility Index (VIX) measures the market volatility of the S&P 500 Index options during the course of a 30-day timespan. Traders call the VIX a “fear index” and the index is calculated in real-time via CBOE’s exchange engine.

For instance, the higher the VIX is it means the S&P 500 is expected to decline and if the VIX drops then traders expect the S&P 500 index to remain relatively stable. The CVX refers to the crypto economy’s “Crypto Volatility Index” by measuring implied volatility via ethereum (ETH) and bitcoin (BTC) options markets.
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