30s Summary
Bitcoin industry veteran, Joe Consorti, has suggested that the imminent US launch of spot Bitcoin exchange-traded fund (ETF) options could transform the market, attracting new investors and significantly increasing liquidity. Set to begin trading on November 19, these financial products offer the opportunity to purchase or sell shares of spot crypto ETFs at fixed prices. If the derivatives market expands, Consorti believes Bitcoin may behave similarly to equities and commodities, potentially generating trillions in trading volume. Last month, QCP Capital predicted that approval of options trading on major exchanges would significantly boost Bitcoin ETF liquidity.
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Joe Consorti, a big name in the Bitcoin industry, says that the upcoming launch of spot Bitcoin exchange-traded fund (ETF) options in the U.S. could be a game-changer. These options are starting to trade in the U.S. on Nov.19. This could bring in a bunch of new investors, both big corporate ones and everyday people.
Spot Bitcoin ETF options are financial products that give people the choice to buy or sell shares of spot crypto ETFs at set prices. This move has even gotten Bloomberg’s senior ETF analyst, Eric Balchunas, excited, calling it a “big freaking deal”.
According to Consorti, options are super important in capital markets because they provide liquidity, help discover price, and offer risk management tools, especially for big institutions that drive a lot of the market.
He mentioned that derivatives – financial contracts based on the value of the underlying assets – in traditional markets are ten to twenty times the size of the underlying market cap. But with Bitcoin, listed derivatives are less than 1% of the $1.8 trillion spot market cap. Bitcoin derivatives are still growing and aren’t as mature as they could be, so there’s a lot of demand for these things, particularly from big institutions.
He added that U.S. equity markets are the biggest and most liquid in the world, so listing options on Bitcoin ETFs opens up the biggest capital market to Bitcoin. This means more liquidity and opportunities. Previously, regular retail investors were excluded from the Bitcoin derivatives market. Now they can join in, thereby expanding the investor base.
If the derivatives markets grow, Consorti reckons that Bitcoin will behave like equities and commodities, which could mean trillions of dollars in potential trading volume. Plus, big market makers, institutional money, and regular investors can all now get involved on a large scale.
Last month, trading firm QCP Capital announced that they expected Bitcoin ETF liquidity to skyrocket after the SEC okayed options trading on the New York Stock Exchange and the Chicago Board Options Exchange.