BTC volatility index

[newmont]

We really need an equivalent of the VIX for BTC.  Anyone have ideas about how to implement this? Anyone want to take this on? I might be willing to offer a bounty for this, server to host.

[gmk80]

What's needed first is a futures market to hedge and/or dampen the volatility. Then we need an index to measure the volatility.

[bitten]

I agree.

[skeeziks]

These sound like reasonable ideas.  How hard would it be to get futures trading in an already-existing exchange?  Or would there need to be a new exchange?

[BitshireHashaway]

What's needed first is a futures market to hedge and/or dampen the volatility. Then we need an index to measure the volatility.

+1. I think that this is possible but it would require someone to really believe in and support the system or support this happening. Whoever does it could make some nice money though:)

[dementyev]

How does a futures market hedge against volatility?

[Rapunzel]

Yeah I want to know this too. :-)

[Chaoskampf]

Whenever I suggest that there should be futures markets, a lot of people start complaining that this will attract attention from the CFTC. Do you guys think this is the case? It doesn't seem like a legitimate concern to me. If nothing else, it could be conducted on a .onion, despite it be horrendously slow. You wouldn't necessarily need futures trading to be done at lightning speeds.

[giorgiomassa]

+1!!

[esbex]

Definitely agree with this. A full range of well-designed financial contracts based on BTC (futures, options on the futures, futures and options on the volatility of those options, etc.) would be absolutely awesome to have. Would add stability to the market and most importantly allow leveraged trading without the need for someone to lend BTC (as futures are zero-cost contracts).

[mvidetto]

BTC is very volatile because of the lack of confidence/trust in the currency.  Adding futures market etc to BTC does not solve that even though it may slightly reduce volatility.  The key here is to have more companies accept the currency, and as more companies accept the currency more users are added to the base.  In the long term, BTC will slowly grow in value because there is a limited number of them and will eventually become a mainstream currency.  Increasing markets for trade removes customers from using it as currency so it may actually increase volatility.  This is because if everyone hoards their BTC the price will increase very quickly and once it rises to a certain point will crash just like in April 2013.  Obviously, this is not the answer for a long term currency.

[fmarcosh]

Have anyone found this kind of indicator? Please share.

[lollipierre]

Surely you can compute it yourself using the MtGox api to get price data for instance.