Which cryptocurrencies are most affected by changes in the VIX (volatility index)?
RAHUL RAJDec 26, 2021 · 3 years ago3 answers
In the world of cryptocurrencies, the VIX (volatility index) is known for measuring the market's expectation of future volatility. Which cryptocurrencies are most influenced by changes in the VIX? How does the VIX impact the prices and trading volumes of these cryptocurrencies? Are there any specific patterns or correlations between the VIX and certain cryptocurrencies?
3 answers
- Dec 26, 2021 · 3 years agoWhen it comes to the impact of the VIX on cryptocurrencies, Bitcoin and Ethereum are among the most affected. As the VIX increases, investors tend to seek safe-haven assets, and both Bitcoin and Ethereum have established themselves as relatively stable and reliable options. This increased demand often leads to a rise in their prices. Additionally, the VIX can also influence trading volumes, as higher volatility can attract more speculative traders to the market.
- Dec 26, 2021 · 3 years agoThe VIX can have a significant impact on altcoins as well. Coins with lower market capitalization and liquidity are generally more susceptible to volatility, and changes in the VIX can amplify this effect. It's not uncommon to see smaller altcoins experience larger price swings compared to major cryptocurrencies like Bitcoin and Ethereum. Traders and investors should be cautious when dealing with these smaller coins during periods of high VIX.
- Dec 26, 2021 · 3 years agoAt BYDFi, we have observed that the VIX has a notable influence on the prices and trading volumes of cryptocurrencies. However, it's important to note that the impact can vary depending on market conditions and other factors. It's always recommended to conduct thorough research and analysis before making any investment decisions based on the VIX or any other external factors.
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