Surging Bitcoin volatility may signal a return to options-driven pricing, an analyst says, as gamma and skew dynamics could amplify swings and set the near-term market tone.
BlackRock’s IBIT has surged past Deribit to become the world’s largest Bitcoin options venue, signaling a shift in institutional interest. This move could reshape the cryptocurrency trading landscape, highlighting growing demand for Bitcoin derivatives.
**SEC Consults on Bitcoin Options Trading as Firms Seek Approval**
The Securities and Exchange Commission (SEC) is soliciting public feedback on proposals for Bitcoin options trading, responding to growing industry interest. Options are financial contracts giving buyers the right, but not the obligation, to trade an asset at a set price by a certain date.
Several firms, including CME Group and VanEck, have applied to the SEC for permission to offer Bitcoin options products. The SEC is seeking comments on issues such as regulation to protect investors, management of risks, and preventing price manipulation.
The industry believes Bitcoin options could provide greater flexibility and hedging opportunities for traders, potentially boosting liquidity and participation in the Bitcoin market. However, the SEC must carefully consider regulatory measures to ensure a fair and transparent trading environment for all participants.
Analysts are closely watching this week’s expiry of approximately $1.9 billion worth of Bitcoin options contracts, citing data that suggests an unexpected outcome may emerge. Much remains to be seen, however, as the often-volatile cryptocurrency looks toward an uncertain future.
Crypto investors now have another way to trade with the added possibility of trading XRP options on the BIT Exchange. Investors are able to gain exposure to the digital asset, leading to increased liquidity and more trading options.
July marked a momentous milestone for the CME and crypto options, with total volume reaching near $1 billion. According to CCData, this marks a relentless surge in cryptocurrency options trading.