Last month, the SEC gave the green light for BlackRock's Bitcoin ETF to offer options trading.
While many believe this could reduce volatility, Bitwise’s Jeff Park suggests it might actually intensify market swings, potentially igniting a Bitcoin “super cycle.”
Park, in a conversation with Anthony Pompliano, explained that incorporating non-crypto assets like gold as collateral in Bitcoin options could reshape trading strategies. This approach, known as cross-collateralization, could make margin trading more efficient, amplifying both price gains and losses depending on how the options market develops.
On October 7, spot Bitcoin ETFs saw massive inflows, with Fidelity leading the way. BlackRock’s ETF followed closely, and the introduction of options could attract even more investors in the future. Analysts are also speculating that the total Bitcoin held by ETFs could soon outpace Satoshi Nakamoto’s holdings.
Meanwhile, a report by 10x Research noted that major market players are increasingly using leverage through Bitcoin options and other financial instruments to drive profits. With options trading hitting billions in monthly volumes this year, its role in shaping Bitcoin’s price movements is expected to grow.
Bitcoin (BTC) has surged more than 40% this year, outperforming major stock indices, bonds, gold and even oil, which has been rising recently due to geopolitical tensions.
With the release of crucial Consumer Price Index (CPI) and Producer Price Index (PPI) data scheduled for this week, three cryptocurrencies are capturing significant market interest.
Despite China’s recent decision to end further economic stimulus, Bitcoin (BTC) and the broader cryptocurrency market could soon experience increased liquidity.
As the bull market unfolds, significant questions arise about Bitcoin’s future and the overall crypto landscape.