common-close-0
BYDFi
Trade wherever you are!

What are the correlations between VIX and the price movements of digital currencies?

avatarTreat ResortsDec 26, 2021 · 3 years ago1 answers

Can you explain the relationship between the VIX (Volatility Index) and the price movements of digital currencies? How does the VIX affect the prices of cryptocurrencies?

What are the correlations between VIX and the price movements of digital currencies?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    The correlation between the VIX and the price movements of digital currencies is an interesting topic. While the VIX measures volatility in the stock market, it can indirectly impact the prices of digital currencies. When the VIX is high, it often indicates increased market uncertainty and risk aversion, which can lead investors to sell riskier assets like cryptocurrencies and seek safer investments. This can result in a decrease in the prices of digital currencies. Conversely, when the VIX is low, it suggests that investors are more optimistic and willing to take on risk, which can drive up the prices of digital currencies. However, it's important to note that the correlation between the VIX and digital currencies may not always be strong or consistent, as the cryptocurrency market is influenced by various other factors. It's advisable to consider a range of indicators and conduct thorough analysis when assessing the relationship between the VIX and digital currencies.