Expert Claims Bitcoin ETF Options Won’t Curb Volatility

Jeff Park, the head of alpha strategies at Bitwise Asset Management, argues that Bitcoin ETF options are unlikely to diminish Bitcoin's inherent volatility.

He points out that traditional money management involves balancing supply and price stability, with central banks playing a crucial role. In contrast, Bitcoin’s supply is capped at 21 million, meaning holders must navigate significant price fluctuations without any guarantees.

Recently, the SEC granted approval for options trading linked to BlackRock’s iShares Bitcoin Trust (IBIT), enabling investors to gain more exposure to Bitcoin, the dominant cryptocurrency.

Park labeled this SEC decision as a transformative moment for the crypto landscape, marking the first regulated leverage on a limited-supply commodity in the financial arena.

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He further noted that the potential for Bitcoin’s synthetic exposure is set to increase substantially, enhancing the utility of Bitcoin ETFs. Options traders will benefit from capturing greater delta while maintaining lower premium costs.

Additionally, since Bitcoin’s implied volatility tends to rise along with its spot price, it experiences negative Vana. This means that during gamma spikes, Bitcoin’s price can rise sharply and rapidly.

There is literally zero chance that BTC ETF options will reduce volatility in the future.

Z.E.R.O.

From my H1 Letter: pic.twitter.com/bM91rxIT6g

— Jeff Park (@dgt10011) September 22, 2024

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.