Is Bitcoin Price Affected by the VIX Index?

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The Electronic Journal of Social Sciences published an article on the VIX index, also known as the fear index, and Bitcoin. In the article, the relationship between the fear index and the BIST100 index, which examines the biggest 100 shares listed in Bitcoin and Borsa Istanbul.

Electronic Journal of Social Sciences published an article to showcase the link between Bitcoin and the VIX index. In the article “An Empirical Application on the Causality Relationship Between Fear Index (VIX), Bitcoin Prices and BIST100 Index” written by Mert Baran Tuncel and Samet Gürsoy, the relationship between BTC and VIX index was discussed. In the research, data between August 2010 and January 2020 were used and the analysis was based on this almost 10-year period.

What is the VIX index?

The VIX index, which is followed around the world, especially by American investors, is used to measure the level of risk perception in the market. The index was created in 1993 by the Chicago Board of Trade (CBOT). The VIX index took the name of the fear index as it is seen as a measure of fear in the markets. The fear index is defined by experts as a very guiding index, especially in the framework of trading in stock markets.

The link between the VIX index and Bitcoin

In the article, which stated that the Toda-Yamamoto causality test was used to understand the relationship between the VIX index and Bitcoin, it was explained that no causality relationship was found between the two. So, according to the calculations made by the Electronic Journal of Social Sciences, there is no link between the BTC price and the VIX index.

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It was explained that when calculations were made, dual testing was performed for both BTC and VIX indices and multiple equations with both dependent and independent variables were examined. As a result of the detailed research, it was observed that there was neither a connection from Bitcoin to the VIX index nor from the VIX index to Bitcoin.

BIST100 investors are affected by the fear index

Although it was determined that the VIX index, also known as the fear index, does not have a relationship with the price of Bitcoin, another data was obtained as a result of the research. In the article, according to the results obtained by using the Toda-Yamamoto causality test, it was explained that there was a causality relationship between the fear index and the BIST100 Index.

BIST100 Index; It is known as an indicator used to measure the performance of the top 100 shares traded on Borsa Istanbul in terms of trading volume and market value. According to the Electronic Journal of Social Sciences article, while BTC price is not affected by the VIX index; BİST100 investors are affected by the fear index.


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