-1.5 C
New York
January 21, 2022
Crypto News

Year 2021 Data Cements Bitcoin As Risk-On Asset

Data reveals that Bitcoin has more and more behaved like a risk-on asset within the yr 2021 as its price actions have reacted to the VIX volatility index.

Bitcoin Cements Itself As A Risk-On Asset During The Year 2021

As per the newest weekly report from Arcane Research, BTC has behaved like a risk-on asset this yr because the crypto’s price has appeared to observe VIX.

“VIX” is the ticker image for the Chicago Board Options Exchange’s Volatility Index. This index tells us concerning the inventory market’s expectations of the volatility primarily based on S&P 500 index choices.

While the official title is the CBOE volatility index, the title “VIX” has caught on as the most well-liked option to discuss with it.

The VIX index is a real-time indicator that measures the anticipated volatility within the market for the approaching thirty days. The index can be also known as the “fear gauge.”

When the worth of this metric is excessive, it means a higher volatility within the inventory market could observe within the close to future. On the opposite hand, low values of the index would counsel a interval of low volatility may be there quickly.

Related Reading | Bitcoin Bearish Signal: Trend Is Again Shifting From Outflows To Inflows

Now, here’s a chart that reveals the obvious relationship between the price of Bitcoin and the VIX index:

Bitcoin Price Chart

Looks like BTC's price has more and more change into associated to the index over the previous few years | Source: The Arcane Research Weekly Update - Week 51

As you’ll be able to see within the above graph, in the course of the yr 2019, which is earlier than COVID got here round, Bitcoin didn’t appear to be affected by concern within the broader market.

However, following the financial and monetary insurance policies that have been permitted in the course of the COVID period, institutional buyers began getting within the coin.

In 2020, the connection between VIX and the Bitcoin price was nonetheless unclear. But from the information of the yr 2021, it’s seen that there’s now a correlation between the 2 metrics.

Bitcoin has responded to concern within the inventory market throughout 2021, exhibiting that institutional buyers for probably the most half take into account the crypto to be a risk-on asset.

Related Reading | Elon Musk Explains DOGE Edge Over Bitcoin, But Where Is He Wrong?

The report notes that due to this, it could possibly be price keeping track of VIX as concern within the inventory market could have implications for BTC’s price.

BTC Price

At the time of writing, Bitcoin’s price floats round $47.5k, down 2% within the final seven days. The under chart reveals the pattern within the price of the coin over the previous 5 days.

Bitcoin Price Chart

BTC's price has plunged down in the previous few days | Source: BTCUSD on TradingView
Featured picture from Unsplash.com, charts from TradingView.com, Arcane Research

Related posts

CEO of Mirror Trading International Bitcoin Ponzi Scheme Arrested in Brazil – Regulation Bitcoin News

Crypto Advisor

2 Cryptocurrency Companies Purchased Ad Slots for 2022’s Super Bowl – Bitcoin News

Crypto Advisor

Tether Freezes Over $150M+ Worth Of USDT Stablecoin

Crypto Advisor

Leave a Comment