March 9 (Reuters) - Exchange operator Cboe Global Markets CBOE.Z on Monday announced plans to launch a volatility index tied to options on BlackRock's BLK.N flagship spot bitcoin exchange-traded fund.
The launch comes as institutional interest in digital assets grows, with investors increasingly seeking tools to hedge risk and gauge sentiment in the fast-evolving cryptocurrency market.
Here is an overview of the details and industry context:
The index, which will trade under the ticker symbol BITVX, is designed to measure the market's expectation of 30-day forward-looking volatility in the bitcoin market.
Bitcoin, the world's largest crypto token, is widely considered the best gauge of sentiment for the roughly $2.43 trillion digital asset class.
"Bitcoin ETF options are a popular way for investors to access and manage bitcoin exposure... a dedicated volatility index will be an additive piece to the ecosystem, helping investors better analyze, price, and hedge risk in digital assets," said Rob Hocking, global head of derivatives at Cboe.
The company said the index will use the proprietary methodology behind its 'VIX' index, popularly known as Wall Street's "fear gauge".
Crypto has exploded in popularity in recent years, with the once-nascent asset class increasingly finding a place in institutional portfolios and gaining acceptance from traditional financial heavyweights, boosting demand for related financial products.
Options markets often provide early signals of shifts in investor sentiment, as traders use them to hedge risk or bet on future price volatility.
The company said the new index, dubbed the Cboe IBIT Volatility Index, will launch on March 23.
(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)
((Manya.Saini@thomsonreuters.com; X: manya__saini;))
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