Core Viewpoint - Risk assets may encounter increased volatility if the Federal Reserve cuts interest rates as anticipated on September 17, with futures tied to the VIX index indicating heightened uncertainty in the market [1][4]. Group 1: VIX Futures and Market Sentiment - The spread between the October VIX futures contract and the September contract has widened to 2.2%, a historically extreme level, suggesting significant market expectations ahead of the Fed meeting [2]. - Traders are currently discounting risk before the Fed meeting, betting that the expected rate cut will stabilize markets leading up to the decision [3]. - The October futures indicate that investors foresee increased turbulence post-Fed decision, contrasting with the current calm reflected in September futures [4][5]. Group 2: Historical Context and Correlation - Historically, the VIX has shown a strong negative correlation with stock prices, typically rising during market stress and declining when stock prices increase, indicating potential volatility spikes could coincide with equity downturns [6]. - Bitcoin's price is closely linked to Wall Street sentiment, suggesting that a volatility surge in stocks could adversely affect the cryptocurrency market as well [7]. - Since November, the correlation between Bitcoin's spot price and its implied volatility indices has turned negative, with Bitcoin's volatility indices reaching record high correlation levels with the VIX, indicating a growing alignment with broader market volatility trends [8].