Wall Street Volatility Gauge Hits 4.5-Year High, Traders Lift Rate-Cut Bets on China Tariffs

April 4, 2025

in Breaking, News

Reading Time: 8 mins read

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By Omkar Godbole|Edited by Sheldon Reback

Updated Apr 4, 2025, 11:33 a.m. Published Apr 4, 2025, 11:30 a.m.

The VIX index, the equities volatility measure known as Wall Street’s “fear gauge,” rose to its highest since October 2020 as U.S.-China trade tensions escalated.
Traders increased their interest-rate cut expectations to 116 basis points this year, up from 100 basis points prior to the news that China had imposed retaliatory tariffs on U.S. goods.
The bitcoin price fell 0.7% to $82,500, with its 30-day implied volatility reaching a two-week high of 54.6%.

The VIX index, which shows the equity market’s expectations for 30-day volatility and is often called Wall Street’s “fear gauge,” rose to 39, the highest since October 2020, after China imposed retaliatory tariffs on the U.S., data from TradingView show.

The increase, coupled with the sharp sell-off in the U.S. stock-index futures, prompted traders to increase estimates of Federal Reserve interest-rate cuts to 116 basis points this year, up from 100 basis points before the China news hit the wires, CME’s FedWatch tool shows.

STORY CONTINUES BELOW

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Bitcoin (BTC) traded 0.7% lower on the day at $82,500 at press time, having earlier put in highs above $84,600. Bitcoin’s 30-day implied volatility, represented by Deribit’s DVOL index, rose to an annualized 54.6%, the highest in two weeks.

Omkar Godbole is a Co-Managing Editor on CoinDesk’s Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.