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Credit Risk and the New Fear Scale

Credit Risk and the New Fear Scale

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Answer Credit Risk and the New Fear Scale

Is there a relationship between your decision to invest in the market and the stability of an index or a currency?!

Of course yes, but what are the criteria that make a particular currency, Bitcoin for example, or a specific indicator a measure of the new fear of the market?!

The CBOE Volatility Index, known for its acronym VIX, is a long-standing and used measure of volatility and fear in the market, which is evidenced by S&P 500 stock price options. The indicator is sometimes referred to as the “fear gauge” of the market.

This means that the stability of this indicator is a strong motive for investing in the market, and thus is a criterion for the risk associated with trading assets or investments in general.

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But what is new in the matter is that it is possible soon = that your decision regarding the path you will take in the market is related only to the state of Bitcoin!!

This is what prominent investor “Brian Stutland” of “Equity Armor Investment” stated on the popular TV program “Fast Money” where he said:

“Bitcoin is becoming a bit of a new volatility index, VIX, by advancing and outperforming credit risk in the banking industry.”

Although the VIX volatility index has long dominated in this regard, Stutland told CNBC that Bitcoin is an indicator of equal efficiency, quality and reliability, saying:

“There is a huge correlation now between the VIX Index and Bitcoin, which 30 days ago – 30 trading days to be precise – started measuring the credit risk in the market. This is what digital currency will become. Little by little it is becoming a way to distance yourself from the credit risks of the banking industry.”

To express the difference between the balance sheets of traditional banks and digital wallets, he said:

Read:Will Bitcoin bring back the 2017 bullish scenario?

“Bitcoin is a way for investors to essentially move their money from banks’ balance sheets to their own wallets.” He continued, “So that they store their money under their pillows in the form of digital currencies.”

Since volatility in the market is closely related to the extent of credit risk, investors act more cautiously with their money when the credit risk of banks increases, and thus a digital currency like Bitcoin is less risky.


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