Bitwise CEO Jeff Park has suggested that the SEC's recent green light for options on BlackRock's Bitcoin ETF could significantly impact the crypto market.
The SEC recently gave the go-ahead for the trading of options on BlackRock’s iShares BTC Trust, marking a major milestone in the market by enabling leveraged trades on Bitcoin.
Park, who leads Bitwise’s alpha strategies, sees this as a significant step forward, highlighting Bitcoin’s inherent volatility. He pointed out that the cryptocurrency often experiences rapid price swings, which could result in both high risk and potential rewards.
He further elaborated that Bitcoin options don’t follow the same patterns as traditional assets, with volatility rising as prices go up. This dynamic, often referred to as a negative bathtub, could trigger a “gamma squish,” where substantial price increases force further buying, potentially driving prices even higher in a self-reinforcing loop.
Park also emphasized Bitcoin’s fixed supply, contrasting it with stocks that can issue more shares, adding that the introduction of options may cause unexpected market reactions. He mentioned that while traditional markets might halt during periods of extreme volatility, the decentralized nature of Bitcoin ensures its continuous operation.
In his view, these changes will likely boost miners’ profits and enhance the security of the Bitcoin network.
Coinbase, a leading US cryptocurrency exchange, believes digital assets are poised for significant appreciation in the coming months.
On September 27, Howard Lutnick, CEO of Cantor Fitzgerald, appeared on Fox Business and called for regulators to recognize Bitcoin as a commodity akin to gold and oil.
Bitcoin continued its upward momentum this past week, reaching as high as $66,000 on Friday, September 27th, as it looks to close out September strong and enter October with even more gains.
The Crypto Fear & Greed Index has hit its highest level since July, holding above 60 for two straight days.