Share this article
'Wall Streetization' of Bitcoin: BTC Volatility Index and the S&P 500 VIX Boast Record 90-Day Correlation
The correlation between BTC's implied volatility indices and the S&P 500 VIX recently hit a record 0.88.
Updated Jul 24, 2025, 6:38 a.m. Published Jul 24, 2025, 6:10 a.m.
What to know:
- Bitcoin's market dynamics are now closely linked to Wall Street, with a record-high correlation of 0.88 between BTC's implied volatility indices and the S&P 500 VIX.
- The correlation suggests BTC's implied volatility indices are becoming fear gauges similar to the VIX, which fluctuates with market sentiment.
- Institutional participation in the crypto market, characterized by volatility selling, is driving the increased correlation with U.S. equities.
In this article
New statistical evidence has emerged, suggesting that bitcoin's market dynamics are now intricately linked to the ebb and flow on Wall Street.
Recently, the 90-day correlation coefficient between bitcoin's 30-day implied volatility indices – Volmex's BVIV and Deribit's DVOL – and the S&P 500 VIX hit a record high of 0.88, according to data source TradingView.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
A positive correlation of 0.88 indicates that the two variables are closely tied. As of Wednesday, the correlation stood at 0.75. The VIX represents the 30-day implied or expected price turbulence in Wall Street's equity index, the S&P 500.
The strengthening correlation suggests that BTC's implied volatility indices are evolving into fear gauges, similar to the VIX, which typically falls during bull runs and rises during sell-offs.
The BVIV has crashed from roughly 67% to 42% this year, moving in the opposite direction of BTC's price, which has risen by 26%. Historically, BTC and its implied volatility tended to move in tandem. Meanwhile, the VIX has dropped 11% this year, while the S&P 500 index has gained over 8%.
According to Markus Thielen, founder of 10x Research, growing institutional participation in the crypto market, characterized by volatility sellers, is behind the collapse in BTC implied volatility and the resulting record correlation with the VIX.
Volatility selling involves writing out-of-the-money (OTM) calls to generate an additional income on top of the spot market holdings. Some traders also write OTM puts.
"This bitcoin cycle continues to be dominated by Wall Street participants, who are actively compressing volatility," Thielen told CoinDesk.
"Rather than speculating directionally, many institutional players are selling call options to generate additional yield—mirroring traditional equity income strategies. As a result, directional flows tend to follow broader risk-on/risk-off dynamics familiar to legacy markets," Thielen added.
Thielen added that the institutional framework has contributed to BTC's growing correlation with the U.S. equities, "particularly as hedge funds and asset managers increasingly apply the same macro playbook across both asset classes."
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
XRP Faces Downside Risk as Social Sentiment Turns Wildly Negative
The turn in crowd mood comes after a two-month slide of roughly 31%, leaving the token vulnerable to further downside if risk appetite weakens across majors.
What to know:
- XRP's price approached the $2 mark as social sentiment around the token turned sharply negative, according to Santiment data.
- The token has experienced a 31% decline over two months, making it vulnerable to further losses if market risk appetite weakens.
- Santiment's sentiment model indicates XRP is in a 'fear zone,' where negative commentary significantly outweighs positive talk, potentially influencing market positioning.
Top Stories
