Bitcoin's True Status and the VIX Index
January 22 2019 - 1:56PM
ADVFN Crypto NewsWire
Bitcoin Global News (BGN)
January 22, 2019 -- ADVFN Crypto NewsWire -- Since it was
created, Bitcoin has been termed an asset that can stand on its’
own and is therefore, not pegged to the movements of the
traditional stock market. According to an article today via
CoinDesk, this status has not been proven yet, due to a few key
indicators.
Central to these indicators is
something which you may not be familiar with, called the VIX Index.
Reportedly, this refers to the CBOE’s Volatility Index, which is
meant to look 30 days into the future to predict the coming
volatility in the S&P 500. In doing this, it focuses mainly on
predicting how much fear will influence the traditional stock
market over this time, which is apparently why it is also called
the “fear gauge.”
In their article today, Coindesk
claims that the VIX Index is supposed to be down when the S&P
500 goes up and up when the S&P 500 drops. With this in mind,
they also circle back to it being termed the “fear gauge” to point
out that the VIX serves as a very useful tool for seasoned
investors to avoid panic selling.
With Bitcoin, however, this does
not all play out as it is supposed to play out. Coindesk reported
that while the VIX showed an inverse correlation with the
traditional stock market at the beginning of and at the close of
2018, the opposite was true with regards to it and
Bitcoin.
If you are wondering why all of
this matters to the average investor, the answer is simple. Until a
new indicator is developed that works with cryptocurrencies and
traditional assets simultaneously, it will be difficult to convince
risk-averse investors that Bitcoin is a safe investment.
By: BGN Editorial Staff
Bitcoin (COIN:BTCUSD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Bitcoin (COIN:BTCUSD)
Historical Stock Chart
From Sep 2023 to Sep 2024