Cboe to launch bitcoin volatility index based on IBIT options

Cboe Global Markets (Cboe: CBOE) announced plans to launch the Cboe IBIT Volatility Index (BITVX) on March 23. The new index will measure 30-day forward-looking volatility expectations for the bitcoin market using options on the iShares Bitcoin Trust ETF (IBIT).

BITVX applies Cboe's VIX methodology to bitcoin, calculating expected volatility from IBIT option prices rather than historical returns. The index aggregates information across out-of-the-money option strikes to produce an implied volatility measure, similar to how the VIX Index operates for S&P 500 options.

"With the new BITVX Index, we're taking the proven framework of Cboe's VIX Index methodology and applying it to bitcoin, giving the market a transparent, rules-based benchmark for expected volatility derived from IBIT options activity," said Rob Hocking, Global Head of Derivatives at Cboe.

The index calculation uses weekly Friday expirations of IBIT options across two maturities that bracket a 30-day target horizon. IBIT represents one of the most actively traded U.S. options tied to digital assets, according to the company's statement.

The launch expands Cboe's volatility index suite into digital asset markets. Cboe operates the VIX Index, which measures 30-day forward-looking volatility for the U.S. equity market based on S&P 500 Index options.

Cboe Global Indices will calculate and administer the new index. The company indicated that bitcoin ETF options provide investors with a method to access and manage bitcoin exposure, and the volatility index could help investors analyze and hedge risk in digital assets.

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