The Bitcoin Volatility Index

What is the Bitcoin Volatility Index?

The Bitcoin Volatility Index is used for tracking the Bitcoin and Litecoin price volatility in US dollars over different periods of time, as well as providing a BTC-USD converter using the current price.

What is volatility and why does it matter?

Volatility is a measure of how much the price of an asset varies over time. Volatility refers to the amount of uncertainty or risk about the size of changes in a financial asset’s value.

A higher volatility means that the price of the asset can change dramatically over a short time period in either direction. A lower volatility means that a financial asset’s value does not fluctuate dramatically, but changes in value at a steady pace over a period of time. If Bitcoin volatility decreases, the cost of converting into and out of Bitcoin will decrease as well.

How do we calculate the volatility?

It uses the standard deviation of the daily open price for the preceding 30-, 60-, 120- and 365-day windows. These are measures of historical volatility based on past Bitcoin and Litecoin prices.

Which sources are used?

Bitpremier uses the CoinDesk API for querying historical Bitcoin data used in the volatility calculation. Furthermore, it uses the BitStamp API for querying the opening price of both Bitcoin and Litecoin. Both sources may change in the future.