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    Bitcoin responds as top global asset with new SEC-approved ETF options trading, driving potential significant price movements

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    Bitcoin is the most responsive global asset, with the US Securities and Exchange Commission approving options on several Bitcoin ETFs which could spark huge price movements. Bitcoin ETFs, such as those from BlackRock and Fidelity, have attracted vast sums in just a month. Options trading on these ETFs could add significant liquidity to the market. Due to its limited quantity, Bitcoin’s increasing price only leads to more investment. This, paired with options trading, could result in significant price surges, potentially beneficial for those invested in Bitcoin.

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    Check out this opinion piece by Mehdi Lebbar, the co-founder of Exponential.fi.

    Bitcoin is currently the most responsive asset in the world. The US Securities and Exchange Commission gave the nod for options on several Bitcoin ETFs. These options can lead to massive price movements thanks to something called gamma squeezes.

    The launch of Bitcoin ETFs such as those from BlackRock and Fidelity is a huge deal. In just the first month, these Bitcoin ETFs attracted a huge amount of money, about $3 billion each, setting records for new ETFs.

    But there’s more. The game changer here is the introduction of options trading on these ETFs, which could add a load of liquidity into the market.

    Bitcoin responds more to human behavior than any other asset: as its price increases, it attracts more attention, which leads to more investment, further pushing up prices. Even though some investors like Jamie Dimon and Warren Buffett think this makes Bitcoin less valuable, others argue that this is what makes Bitcoin special. This is because Bitcoin is finite, there’s a limited amount in existence, making it incredibly valuable in its own right.

    Adding options trading to Bitcoin ETFs brings another layer to this. Options give investors the right (but not the obligation) to buy or sell Bitcoin ETFs at a set rate. When they expect Bitcoin’s price to go up, they buy options on the ETFs. This forces those selling the options to hedge by purchasing Bitcoin or Bitcoin ETFs, increasing demand.

    All this buying can create a feedback loop called a “gamma squeeze”, which boosts the price. It’s like an echo chamber that only makes the price go higher. And while this might increase volatility for now, it also opens up many opportunities.

    Bitcoin is a finite asset, and with the arrival of Bitcoin ETF options, a second layer of responsiveness is introduced. With each price increase adding fuel to the fire, we might soon see Bitcoin’s price surge to heights previously unimaginable.

    With this new phase of Bitcoin ETF options, it’s anyone’s guess how high the Bitcoin price might get. The influence of this double-whammy of responsiveness may result in a perfect storm for Bitcoin’s price. So, keep an eye on this space.

    Remember, this article is just for your information and not financial advice. The views expressed are from Mehdi Lebbar himself and don’t necessarily reflect the views of Cointelegraph.

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