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Last month, the U.S. Securities and Exchange Commission (SEC) approved options trading for BlackRock’s spot Bitcoin 
$104,570 ETF. However, Jeff Spark, the head of Bitwise Alpha Strategies, recently stated in an interview that the increasing volatility of options on spot ETFs could lead to a Bitcoin super cycle.
Bitcoin ETF Options May Bring High Volatility
The launch of spot Bitcoin ETFs has seen significant success, achieving approximately $60 billion in assets under management within the first nine months. This makes BTC ETFs one of the most successful ETF launches on Wall Street.
While many believe that the approval of options for spot Bitcoin ETFs will reduce volatility, Jeff Spark rejects this notion, suggesting instead that it could create a super cycle for Bitcoin.
Demand for Bitcoin Options is Rising
In an interview with Anthony Pompliano, Spark emphasized the potential for cross-collateralization in the crypto space. He highlighted the importance of including uncorrelated assets like GLD ETFs or gold assets in collateral pools for Bitcoin options. This cross-collateralization could establish a more efficient margin framework that allows non-crypto assets to be used as collateral in regulated environments.
According to Bitwise management, this shift will create new opportunities for margin systems. Additionally, Spark noted that Bitcoin options trading could amplify market movements both upwards and downwards, adding that the long-term effect will depend on how the options market evolves.
On October 10, Monday, inflows into spot Bitcoin ETFs reached $235 million. Fidelity FBTC led with $103.7 million in inflows, while BlackRock’s IBIT ETF recorded $97 million in inflows. The option approval for BlackRock’s Bitcoin ETF could enhance the attractiveness of this vehicle in the future.
Recent reports indicate that BTC ETFs could surpass the total Bitcoin holdings of Satoshi Nakamoto. A documentary set to be released today will reveal the identity of Bitcoin’s creator, with Len Sassaman being a prominent name.
New reports suggest that major players in the Bitcoin ecosystem are strategically using leverage to capitalize on the market uptrend. According to a report by 10x Research, Bitcoin options and shares of mining companies like MicroStrategy are being utilized to achieve significant gains.
Bitcoin options trading has fluctuated between $42 billion and $71 billion in monthly volumes in 2024. As traders increasingly utilize options for leverage and strategic positioning, the role of these financial instruments will grow, impacting the dynamics of the Bitcoin market in the coming months.
