According to BlockBeats, on September 21, Jeff Park, head of strategy at Bitwise Alpha, published a long article on social media stating that “SEC approval of BlackRock’s Bitcoin spot ETF options trading” will lead to an explosive rise in Bitcoin. The brief content includes:
Jeff Park believes that the market is about to witness the most incredible rise in “volatility” in financial history, which should be more fully explained. The contributing factors include several characteristics of Bitcoin, the nature of the regulated options market, and the powerful combination of the two. He believes that “SEC approval of BlackRock Bitcoin spot ETF options trading” marks the biggest progress that the cryptocurrency market may have made.
For the first time, Bitcoin’s notional value will be “partially banked” through ETF options. While Bitcoin’s limited non-custodial supply is its greatest strength, it is also a drag, limiting the ability to create synthetic leverage. Now, for the first time, Bitcoin will have a regulated market, with the CFTC protecting clearing members from peer risk. This means synthetic notional exposure to Bitcoin can grow exponentially.
In addition, Bitcoin has a unique volatility feature, when the spot price rises, the volatility also rises, which means that the delta increases faster. When traders who short gamma hedge (gamma squeeze), the situation of Bitcoin will be explosively recursive. Short traders will be forced to continue to buy at higher prices, and more buying will bring more rises). A negative vanna gamma squeeze will make the price of Bitcoin rise like a rocket.
In summary, the Bitcoin ETF options market is the first time the financial world has seen regulated leverage on a truly supply-constrained perpetual commodity. Things may get crazy, so crazy that regulated markets may be forced to shut down. But what is extraordinary about Bitcoin is that there will always be a parallel, decentralized market that cannot be shut down, unlike stocks.
