Wall Street's volatility gauge hits 4-1/2-year high as traders increase bets on China tariff-related interest rate cuts
Bitcoin's 30-day implied volatility, as measured by Deribit's DVOL index, has risen to 54.6% year-over-year, the highest in two weeks.
Author: Omkar Godbole | Edited by: Sheldon Reback Updated: Apr 4, 2025 2:55 PM Published: Apr 4, 2025 11:30 AM
What you need to know:
- The VIX index, which measures stock volatility and is known as Wall Street's “fear gauge,” hit its highest since October 2020 amid rising trade tensions between the U.S. and China.
- Traders raised their forecasts for interest rate cuts to 116 basis points this year, up from 100 basis points before news that China imposed retaliatory tariffs on U.S. goods.
- Bitcoin's price fell 0.7% to $82,500, while its 30-day implied volatility hit a two-week high of 54.6%.
The VIX, which measures stock market expectations for 30-day volatility and is often referred to as the “fear gauge” on Wall Street, rose to 39, its highest since October 2020, after China imposed retaliatory tariffs on U.S. stocks, according to TradingView data.
The index's gain, coupled with a sharp drop in U.S. stock index futures, prompted traders to revise up their expectations for a Federal Reserve interest rate cut to 116 basis points this year from 100 basis points before the China news, according to CME's FedWatch tool.
Bitcoin (BTC) was trading 0.7% lower at $82,500 at press time, having previously hit a high of over $84,600. Bitcoin's 30-day implied volatility, as reflected by Deribit's DVOL index, has risen to 54.6% year-over-year, the highest in two weeks.
