Bitcoin Volatility Index Rises Amid Market Activity

According to BlockBeats, the BitVol Index, a measure of Bitcoin's expected 30-day implied volatility, increased to 65.36 on December 25, marking a 3.3% rise in a single day. The index, developed by financial index company T3 Index in collaboration with options trading platform LedgerX, reflects the volatility implied by the prices of tradable Bitcoin options. Implied volatility is derived from the actual prices of options, calculated using the Black-Scholes option pricing model. This model uses the actual option price and other parameters, excluding volatility, to determine the implied volatility. The actual price of options is determined by the competitive actions of numerous options traders, making implied volatility a representation of market participants' views and expectations about future market conditions. As such, it is considered the closest estimate of the true volatility at that time.