What is the Digital Currency Heartbeat Index?

The digital currency market heartbeat index (#Pulse Index), referred to as the heartbeat index, is the price of Bitcoin this week.At-the-money optionsimplied volatilityValue, used to measure the uncertainty of digital currency market price. The heart rate index is named for its fluctuation curve on the time axis similar to that of an electrocardiogram.

Volatility is a conventional indicator of financial asset price fluctuations, and it can also be applied in the digital currency market. The heartbeat index is derived fromoptions marketimplied volatility. In the selection of the measurement standard, the implied volatility of Bitcoin is used as the measure of the heartbeat index of the entire digital currency market, because the Bitcoin option market is the most sound in the entire digital currency market.

The higher the value of the heartbeat index, the more violent the market price fluctuations and the stronger the uncertainty of investment returns, and vice versa. According to the level of its value, it can be divided into three levels: boredom (≤50%); excitement (50%~100%); extreme excitement (≥100%). The monitoring of the heartbeat index since the end of 2019 found that the heartbeat index fluctuates between 50-100 all year round, and the peak value of "severe heartbeat" (for example, the sharp drop in crude oil in March 2020) is close to 250 in certain historical times.

The prototype of the Heartbeat Index in the stock options market is the VIX Index (CBOE Volatility Index), the trading code of the Chicago Board Options Exchange Market Volatility Index. The VIX index is used to measure the implied volatility of S&P 500 options and is a measure to understand the market's expectations for market volatility in the next 30 days. Often referred to as the "fear index" or "fear indicator".