Bitcoin Volatility Index Maintains Downward Trend Over the Last Month

The BitVol (Bitcoin Volatility) Index, presented by financial index company T3 Index in conjunction with Bitcoin options trading platform LedgerX, has maintained its downward trend over the last month, falling to 52.88 yesterday, down from its low in February this year and up 0.74% from the previous day. 

The BitVol index measures the 30-day expected implied volatility derived from the price of tradable bitcoin options. Implied volatility is the volatility implied by the actual option price. It is the inverse volatility derived by substituting the actual option price and other parameters other than volatility σ into the B-S option pricing formula. 

The actual price of an option is determined by competition among many option traders, and therefore, implied volatility represents market participants' perceptions and expectations about the future of the market and is thus considered to be the closest to the true volatility at that time.