The lack of volatility in global markets is leading investors to seek riskier investments with increased rewards. Cryptocurrencies, such as Bitcoin, are being used to feed this increased investor appetite.
Analysts at Deutsche Bank have asserted that there is a correlation between the price of Bitcoin and the volatility index (VIX). The analysts backed up their argument saying that the first three weeks of 2018 so far show “correlation between Bitcoin and VIX has increased dramatically.”
The analysts go on to say:
The current ‘triple-low environment’ of low interest rates, low spreads, and low volatility has given birth to new asset classes like implied volatility (ETFs selling volatility), and cryptocurrencies.