How the BVI Works

The Bitcoin Value Index (BVI) is a modular, multi-asset cost-of-living engine that tracks expenses across value units like Bitcoin, Gold, and Equities, offering a fresh perspective on cost and value measurement.
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It attempts to address the question:
‍How does the cost of living vary when measured in different value units over time?

‍At its foundation, the BVI tracks 32 real-world goods and services across 8 essential spending categories, including housing, food, transportation, healthcare, childcare, and more. The BVI components were chosen to reflect actual U.S. household consumption — not survival-level basics, but real economic norms.

The backend architecture follows a transparent, two-stage process:

1. Component Level Pricing

Each component series (e.g., eggs, rent, natural gas) is:

Downloaded in raw form from trusted public sources like the Bureau of Labor Statistics (BLS), Federal Reserve Economic Data (FRED), and the Energy Information Administration (EIA)
Cleaned, standardized, and converted into multiple value units (BTC, Gold, SPX, SPXTR)
Retained in real-world units (e.g., USD/pound, BTC/month) with no artificial normalization or smoothing

This process preserves the true cost of each item across various value regimes.

2. Index Construction

The Core BVI (BTC) and its value-unit variants (e.g., BVI-USD, BVI-Gold) are built by:

Calculating monthly log returns for each component series
Weighting those returns based on U.S. household consumption patterns
Compounding returns into a cumulative index
Normalizing all index variants to a base value of 1000 on June 30, 2010

This method preserves compounding behavior, ensures time alignment, and enables a direct comparisons across value units.

Key Principles

✅ Log returns capture compounding behavior with precision ✅ All value units are processed modularly and independently ✅ No smoothing, no adjustments, no external influences ✅ Designed for clarity, comparability, and trust ✅ Volatility preserved, not smoothed
Bitcoin's price swings reveal real market discovery, unlike the CPI's artificial stability

Update Timing

The BVI is updated on a monthly cycle, with two release points:

Preliminary Estimate: Published around the 16th of each month Final Version: Released 1-2 business days into the following month

While most components follow a monthly reporting cadence, a few — such as mortgage rates (weekly), home prices (quarterly), and natural gas (lagged monthly) — are aligned using a consistent methodology to reflect conditions as of the last day of the target month.

To explore the full methodology and component-level logic, please request a copy of the
[System Overview] and [Component List].