"That’s an astronomical number for which there’s going to be new flows and liquidity coming into this market which will likely therefore add volatility,” Park stated.“In the global economy, derivatives markets are far larger than the spot markets,” he added, pointing to the fact that in traditional asset classes like equities and commodities, derivatives play a critical role in risk management and speculation.“Bitcoin is moving toward a similar structure, and that’s where we’ll see the most significant price movements and liquidity,” Park concluded.
Why Bitcoin ETF Options Are A Game Changer Park outlined a comprehensive thesis in the interview, noting, “Volatility is not just a static measure of past performance; it reflects the distribution of potential outcomes and the severity of those outcomes.” He emphasized that the introduction of Bitcoin ETF options will bring new dimensions to how traders interact with Bitcoin, potentially amplifying both price rises and falls.
In practical terms, Park said, “Dealers who are short gamma must buy more Bitcoin as prices rise and sell more as prices fall, thereby adding to the volatility.” This dynamic is crucial to understanding how ETF options could push Bitcoin’s price to extremes in both directions.
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