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The Launch of Bitcoin ETF Options Will Help Boost Liquidity, Alex Thorn Says

Key Points:

BlackRock’s iShares Bitcoin Trust ETF began options trading on Nasdaq, offering new ways to trade and speculate on Bitcoin’s price.
Galaxy Digital’s Alex Thorn predicts Bitcoin ETF options trading will reduce BTC’s volatility, increase liquidity, and attract a broader investor base.

Options on BlackRock’s iShares Bitcoin Trust ETF (IBIT) hit the market today on the Nasdaq, marking a significant milestone for Bitcoin investors.

Experts Predict Reduced Volatility With the Launch of Bitcoin ETF Options

Galaxy Digital’s head of research, Alex Thorn, is expecting that the availability of the Bitcoin ETF options will cut BTC volatility while growing its investor base.

“Over time as it’s more widely held, volatility will decrease, options will help dampen volatility and as volatility comes down people can take larger position sizes,” said Thorn in an interview with Bloomberg.

The introduction of Bitcoin ETF options could help institutional and retail investors. Institutions could use the options to hedge their positions better, adding to market liquidity. Thorn added that less volatility could even make more investors consider useful applications of Bitcoin rather than speculate on the underlying asset. However, he said that the entire cryptocurrency space also needs to learn to live with the growing involvement of traditional finance.

Bitcoin Sets New All-Time High as Markets Expand

Contrary to predictions of reduced volatility, the price swings of Bitcoin have continued to attract speculative investors. The token has surged more than 100% this year, reaching an unprecedented high of almost $94,000 on Tuesday.

The rise in Bitcoin’s value dates back to January when the Securities and Exchange Commission allowed Bitcoin ETFs for U.S. investors. BlackRock worked with Nasdaq for 10 months to prepare for the options launch, which proved a success after the Commodity Futures Trading Commission cleared the options earlier this week.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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.