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Bitcoin is highly correlated with the S&P 500 volatility, and institutions are leading a new cycle in the crypto market.
[Crypto World] According to news from Crypto World on July 24, data shows that the 30-day implied volatility index of Bitcoin (BVIV/DVOL) has reached a historical high of 0.88 in its 90-day correlation with the S&P 500 volatility index (VIX), indicating a significant increase in the correlation between the crypto assets market and the volatility of US stocks. Currently, this correlation coefficient remains at a high level of 0.75.
Analysts point out that this phenomenon reflects that Wall Street institutions are leading the current cycle of the crypto market. The founder of a research institution stated that institutional investors are compressing volatility by selling a large amount of call options, causing Bitcoin price movements to increasingly be influenced by traditional market risk preferences. Since the beginning of this year, the BVIV index has dropped from 67% to 42%, while the Bitcoin price has risen by 26% during the same period, breaking the historical trend of both moving in the same direction.