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Bitwise executive Jeff Park thinks \u201cthings will likely get wild\u201d now that the U.S. Securities and Exchange Commission (SEC) has approved options on BlackRock\u2019s Bitcoin (BTC<\/a>) exchange-traded fund (ETF).<\/p>\n Last week, the SEC greenlit<\/a> accelerated approval for the listing and trading of options on the iShares Bitcoin Trust (IBIT), BlackRock\u2019s ETF.<\/p>\n Park, Bitwise\u2019s head of alpha strategies, says<\/a> the approval \u201cmarks the most monumental advancement possible for the crypto market.\u201d The executive notes that options will unlock synthetic flows with leverage for BTC.<\/p>\n He also says Bitcoin has unique volatility characteristics, including a \u201cvolatility smile.\u201d<\/p>\n \u201cBitcoin is unique because melt-ups are as frequent as melt-downs, so the market demands a risk premium on both sides. The practical implication? It\u2019s seen in the second order Greek called vanna. Historically, with call options, as spot rises, implied volatility tends to fall. So while the option delta increases (becoming more in the money), the rate of increase slows \u2013 this is positive vanna, which creates a sort of drag.\u00a0<\/em><\/p>\n However, Bitcoin options have negative vanna: as spot goes up, so does volatility, meaning delta increases even faster. When dealers who are short gamma hedge this (a gamma squeeze), Bitcoin\u2019s case becomes explosively recursive. More upside leads to even more upside, as dealers are forced to keep buying at higher prices. A negative vanna gamma squeeze acts like a refueling rocket.\u201d\u00a0<\/em><\/p>\n Park notes that BTC can\u2019t be diluted, unlike meme stocks for companies where management can issue new shares.<\/p>\n \u201cIn summary, the Bitcoin ETF options market is the first time the financial world will see regulated leverage on a perpetual commodity that is truly supply constrained. Things will likely get wild. In such scenarios, regulated markets may shut down.\u00a0<\/em><\/p>\n But the remarkable thing about Bitcoin is there will always be a parallel, decentralized market that can\u2019t be shut down, unlike GME \u2013 which, as you can imagine, will add even more fuel to the fire.<\/em><\/p>\n It\u2019s going to be unbelievably fantastic.\u201d<\/em><\/p>\n Park also says<\/a> options are going to be great for Bitcoin miners.<\/p>\n \u201cMiners help us find the FLOOR. ETF options will help us imagine the idea of grasping the CEILING, and miss it each time as it goes higher \u2013 which in turn help miner profitability and enhance security.\u201d<\/em><\/p>\n Don’t Miss a Beat \u2013 Subscribe<\/a> to get email alerts delivered directly to your inbox <\/span><\/em>  <\/p>\n Generated Image: Midjourney<\/span><\/em><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":" Bitwise executive Jeff Park thinks \u201cthings will likely get wild\u201d now that the U.S. Securities and Exchange Commission (SEC) has approved options on BlackRock\u2019s Bitcoin (BTC) exchange-traded fund (ETF). Last week, the SEC greenlit accelerated approval for the listing and trading of options on the iShares Bitcoin Trust (IBIT), BlackRock\u2019s ETF. Park, Bitwise\u2019s head of […]<\/p>\n","protected":false},"author":2,"featured_media":354888,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[173],"tags":[201,248,251,246,257,255,250,252,247,253,249,256,254],"class_list":["post-354880","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-others","tag-blockchain","tag-bsc","tag-chainlink","tag-coin","tag-cryptocurrency","tag-gta","tag-looks-rare","tag-oracle","tag-polygon","tag-quickswap","tag-safe-moon","tag-wallet","tag-wordpress"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/354880","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=354880"}],"version-history":[{"count":3,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/354880\/revisions"}],"predecessor-version":[{"id":354891,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/354880\/revisions\/354891"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/354888"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=354880"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=354880"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=354880"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n<\/p>\nDisclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.<\/h6>\n<\/div>\n