What is the Bitcoin Fear And Greed Index – And Does it Work? Using analysis of investor sentiment to predict when is a good time to buy or sell investment assets is nothing new. In 1993, the Chicago Board Options Exchange created the CBOE Volatility Index (VIX). This is a tool that measures market risk, by analyzing recent price inputs of the S&P 500, together with general investor sentiments. Shortly after the launch of the VIX, CNN Money created their own Fear & Greed Index (FGI). Like the VIX, the FGI attempts to measure investor emotions of fear and greed, before extrapolating what general sentiments might mean for short and long-term stock prices.  The VIX and CNN’s Fear and Greed Index work on the premise that greed and strong investor confidence help drive up stock prices.  When investors are more fearful that markets are about to correct or dip lower, the VIX and FGI assume that stock prices will fall.  In both cases, the VIX and FGI use a simple speedometer-like chart to show investors which direction stock market sentiments seem to be leaning in on a daily, weekly, and monthly basis.