How does the VIX formula affect the volatility of digital currencies?

1 answers

• Bruna NascimentoMay 20, 2023 · 3 years ago
  The VIX formula, although primarily used in traditional finance, can indirectly affect the volatility of digital currencies. When the VIX is high, it indicates increased market volatility and uncertainty. This can lead to a risk-off sentiment among investors, causing them to sell off riskier assets like digital currencies. As a result, the prices of digital currencies may experience greater fluctuations and overall volatility. Conversely, when the VIX is low, it suggests a more stable market environment, which can contribute to lower volatility in digital currencies. However, it's important to note that the VIX formula is just one of many factors that can influence the volatility of digital currencies. Other factors such as market demand, regulatory developments, and technological advancements also play significant roles in shaping the volatility of digital currencies.
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