News

Bitwise Jeff Park: New Bitcoin ETF Options Approval Will Make BTC to Rise

Key Points:

  • Jeff Park from Bitwise Alpha predicts that Bitcoin ETF options approval could lead to unprecedented volatility in Bitcoin prices.
  • While this approval allows for hedging and volatility management, further approvals from the OCC and CFTC are required before the options can be officially listed.
Jeff Park, a strategist with Bitwise Alpha, expects the recent approval by the SEC in favour of BlackRock’s Bitcoin ETF options trading might be a catalyst for a significant surge in Bitcoin’s volatility.

Read more: Nasdaq Now Withdraws Bitcoin ETF Options Proposals Amid Skepticism Over SEC Approval

SEC Clears Bitcoin ETF Options Trading

Jeff Park nailed this development as probably the largest event in the history of the cryptocurrency market. Through Bitcoin ETF options, the notional value of Bitcoin will, for the first time be “fractionally banked” as a new avenue to tap regulated market dynamics. This is all so important in light of the limited non-custodial supply of Bitcoin today driver that has historically constrained synthetic leverage creation.

According to Park, SEC approval will ensure the CFTC offers protection to clearing members, with Bitcoin’s synthetic notional exposure growing exponentially.

The Bitwise Alpha exec also elaborated on some of the unique volatility characteristics of Bitcoin that when the spot price goes up, volatility goes up. That creates a so-called “gamma squeeze” among traders, who are forced to cover short positions, driving prices even higher.” In contrast, he states that upon a negative “vanna gamma squeeze,” prices could go even higher, feeding into a cycle of explosive price action.

Future Approvals Needed for Full Market Implementation

By approving options on BlackRock’s iShares Bitcoin Trust, the SEC is paving the way for investors to start hedging their positions in Bitcoin and dampening volatility with the new instruments. The agency said Bitcoin ETF options would be treated similarly to regular ETFs, meaning they would be subject to position limits and margin requirements.

Eric Balchunas, Bloomberg Senior ETF Analyst, says more approvals for other Bitcoin ETFs could be in the offing, possibly bringing in liquidity and larger institutional buyers. Yet, he qualified such statements by saying that there are still big regulatory hurdles that need to be jumped before options can be listed, namely final approval from the OCC and the CFTC, which hasn’t yet been given, nor a timeline provided.

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.

Recent Posts

Best Coins to Buy in December 2024: Qubetics Offer 630% ROI, Polkadot Delivers on Interoperability and Near Protocol’s Scalability is Talk of the Town

Explore the best coins to buy in December 2024—Qubetics with its thrilling presale, Polkadot’s interoperability,…

2 hours ago

Crypto Market Outlook 2025 Key Factors to Watch

The Crypto Market Outlook 2025 highlights key areas: stablecoin growth, tokenization, crypto ETFs, DeFi innovation,…

5 hours ago

Bitcoin Quantum Computing Threat Expected to Take Decades

The Bitcoin quantum computing threat is years away, but reserves already support post-quantum signatures via…

5 hours ago

Best New Meme Coins to Invest in Today: BTFD Coin Wows Investors with Unmissable Stage-7 Price Reversal as Book of Meme and Snek Crash

Don't miss BTFD Coin's Stage-7 presale dip! Find out why it's leading the pack of…

5 hours ago

Crypto Hedge Funds Banking Issues Persist Over Recent Years

A WSJ survey reveals crypto hedge funds banking issues over three years, with 120 out…

5 hours ago

GraniteShares Crypto ETFs Target U.S. Crypto-Related Stocks

GraniteShares Crypto ETFs aim to offer leveraged exposure to crypto-focused stocks like Riot Platforms and…

6 hours ago

This website uses cookies.