Reference probability

How we calculate the crypto reference probability

On markets that ask where Bitcoin, Ether, Solana or XRP will be priced at a set time, we show a reference probability for each contract: the chance the price finishes above, below or inside the contract’s range, computed from the current Coinbase price and how much the price has moved recently. It is a number computed from public data, not our own forecast and not a recommendation.

Method version crypto-v1.

Inputs

  • The Coinbase price of BTC, ETH, SOL and XRP in US dollars, read every 15 minutes.
  • The last 7 days of those prices, to measure volatility.
  • The contract’s strike or range and its close time, from the venue.

The calculation

Volatility is the annualised standard deviation of 15-minute log returns over the last 7 days, from at least 96 returns.

The price at the contract’s close is treated as lognormal around the current price with no drift: the model expects no move up or down on average, only moves of the size the last week has seen, growing with the time left to close.

The probability of finishing above a strike follows from that distribution. A range contract is the chance of finishing above its lower end minus the chance of finishing above its upper end.

When no reference is shown

  • The latest Coinbase price is more than 20 minutes old, or there are fewer than 96 returns to measure volatility.
  • The contract closes in less than 30 minutes or more than 15 days.
  • The market asks whether a price is reached at any time before a date, such as an all-time high. Those need a different model and get no reference.
  • The latest reference is more than 30 minutes old.

Limits

  • Kalshi settles on a 60-second average of the CF Benchmarks real-time index, and Gemini on its own settlement source. Both track the Coinbase price closely, but not exactly.
  • One week of volatility can understate how far prices move around big news, and a lognormal model gives large jumps less weight than they get in practice.
  • Close to expiry, the last traded price on a thinly traded contract can be stale, so a gap there may say more about the market price than the reference.

How well it does

Every reference is stored with the inputs behind it and the time it was computed, so any number shown can be reproduced. Once enough of these markets have settled, we will publish how the reference probability and the market price each scored against the actual outcomes, including where the reference does worse than the market.

Not financial advice. Trading involves risk. See the methodology for our other sources and the responsible trading page.