The Bitwise CEO argues how it may be the other way around from the widely held belief that Bitcoin ETF options will reduce volatility.
The U.S. Securities and Exchange Commission (SEC) approved option trading on the BlackRock Bitcoin ETF last month. But according to Jeff Park, Head of Alpha Strategies at Bitwise, options on the BTC ETFs may lead to more volatility and a Bitcoin super cycle.
Bitcoin ETF options can bring heightened volatility
Spot Bitcoin (BTC) ETFs have been a huge success since its inception; in the first nine months alone, the product has generated around $60 billion in AUM. As a result, the Bitcoin ETFs rank among Wall Street’s most successful ETF launches.
The approval of the options for the spot Bitcoin ETFs would bring volatility down in what many people believed. Jeff Park, however, defies conventional wisdom by suggesting that it may instead trigger an immediate super cycle for Bitcoin going forward.
In a recent interview, Jeff Park discussed the possibilities for cross-collateralization in the cryptocurrency field with Anthony Pompliano. The Bitwise CEO stressed how important it is to include assets that are not linked in collateral pools for Bitcoin options, such gold or GLD ETFs. Cross-collateralization has the potential to produce a margin structure that is more effective and permits the use of non-crypto assets as collateral in controlled settings.
The Bitwise CEO stated that this change will allow margin systems to take advantage of new opportunities. In addition, he discussed the directional impact of trading Bitcoin options, speculating that these products may accentuate upward and downward market moves. Park went on to say that how the options market develops will determine the long-term impact.
Here is the INSANE Bitcoin Options Super Cycle Theory.
Bitwise’s Jeff Park (@dgt10011) explains why the new ETF options could lead to significant volatility.
We recorded this conversation because I believed the opposite. Watch to see if I change my mind 🙂
0:00 – Intro
1:19… pic.twitter.com/tMBD3zDWWm— Anthony Pompliano 🌪 (@APompliano) October 7, 2024
Inflows into spot Bitcoin ETFs reached $235 million on Monday, October 7. Fidelity FBTC led the way with $103.7 million in inflows, followed by BlackRock’s IBIT with $97 million. The BlackRock Bitcoin ETF IBIT may become more appealing in the future with the acceptance of options.
According to recent sources, the total amount of Bitcoin held by Bitcoin ETF is expected to surpass the Bitcoin holdings of Satoshi Nakamoto. Len Sassaman is topping the prediction polls in an HBO program that will be released today and reveal who invented Bitcoin.
Demand for Bitcoin options on the rise
Large participants in the Bitcoin ecosystem are deliberately creating leverage to profit from price upside, according to a recent research by 10x Research. Additionally, the paper identifies a developing trend in which significant returns are pursued by using leverage through products like Bitcoin options, the stock of mining companies, and businesses like MicroStrategy.
Monthly volumes for Bitcoin (BTC) options trading this year (2024) have varied from $42 billion to $71 billion. The function of these financial instruments will expand due to traders’ increased use of options for leverage and strategic positioning, which will impact the dynamics of the Bitcoin market in the upcoming months.
Ethereum price at a make-or-break junction, ETH Whale selling continues
According to cryptocurrency researcher Ali Martinez, if the price of Ethereum falls below $2,300, it may tumble by 30% to $1,600. Whale selling of ETH continues.
Ethereum (ETH), the second-largest cryptocurrency in the world, has been experiencing an even harsher correction as the unraveling of Bitcoin continues, with a further 7% decrease on the weekly charts. While the ETH whale selling has persisted this week, the price of Ethereum is now significantly closer to the critical support level of $2,300.
Ethereum price drop under $2,300 can trigger 30% crash
Well-known cryptocurrency researcher Ali Martinez just stated that 2.77 million addresses bought 52.65 million ETH together, indicating that $2,300 is a critical support level for the price of ETH. He stated that there is a possibility of another three-fold rise from here if the bulls are able to hold this support and turn around the ETH trend. Nevertheless, there may be a further 30% drop to $1,600 if the ETH bears are able to breach the $2,300 mark.
“If Ethereum can hold above $2,300, we may see a new rally that could push the price toward $6,000,” Martinez noted. As a result, it might determine the course of Ethereum’s future and be a make-or-break event. With a market capitalization of $2,422 as of the time of publication, the price of ETH is 1.2% lower at $2,432 levels.
On the other hand, following the Dencun update, the Ethereum mainnet cost has achieved an all-time low amid a boom in transactions on the Layer 2 platforms. Because less fees are being burned, ETH has reversed its present deflationary tendency and become inflationary once more. This puts Ethereum pricing at the danger of a rise to $3,000. However, the ongoing sell-off by ETH whales has recently soured investor mood.
ETH Whale selloff continues
An ETH whale from the Ethereum ICO era, who was awarded 150,000 ETH at the time of the ICO, has deposited a sizeable amount of ETH again to Kraken, according to current data from Spotonchain. The whale sent 5,000 ETH, or $12.2 million, to the exchange just four hours earlier.
Additionally, the data reveals that this whale has deposited 45,000 ETH ($113.3 million) to Kraken at an average price of $2,517 during the last 15 days. After these large transactions, the whale still has 94,450 ETH, which is almost $230 million in value. Consequently, this ongoing selling by the ETH whale demonstrates
The Ethereum whale, who received 150K $ETH during ICO, deposited another 5K $ETH ($12.2M) to Kraken just 4 hours ago.
In total, this whale has deposited 45K $ETH ($113.3M) to #Kraken over the past 15 days at an average price of $2,517, leaving 94,450 $ETH ($230M) remaining.… https://t.co/2BLcWey4Kx pic.twitter.com/TnlbdrGV3d
— Spot On Chain (@spotonchain) October 8, 2024
Given the present state of the market, investors are shifting their funds away from Ethereum and into rivals like Sui (SUI), Solana (SOL), and Avalanche (AVAX) as sentiment surrounding ETH declines.
However, investments into Ethereum ETFs have also decreased dramatically in recent times. There were no inflows into any of the spot Ethereum ETFs on Monday, October 7.
Silk Road Bitcoin: US Supreme Court denies $4.4b ownership case request from Battle Born
The lawsuit brought by Battle Born Investments about ownership of 69,370 Bitcoin, valued at $4.38 billion, which the US took from the Silk Road dark web marketplace has been rejected by the US Supreme Court.
On October 7, the US Supreme Court released an order list that included Battle Born Investments’ motion for a review of the ownership of 69,370 Bitcoin that had been taken from the Silk Road criminal market.
According to Battle Born Investments, rights to the confiscated Bitcoin (BTC) were acquired through a bankruptcy estate. However, the company was unable to persuade the courts in 2022 or 2023 when it filed for bankruptcy in an attempt to get Bitcoin following the closure of Silk Road in 2013.
The US government may now sell the digital assets that were taken from Silk Road since the Supreme Court declined to take up the matter again.
Financial attorney Scott Johnsson forecast in mid-August 2024 that the US Marshalls will liquidate Silk Road’s Bitcoin holdings shortly after Founders Fund published data from Tokenview, a Bitcoin explorer, showing that over 19,000 BTC had been transferred to Coinbase.
Yes, US Marshal Service (USMS) is almost certainly selling silk road bitcoin. Joey is right (at least in the present). USMS has been sending BTC to a custodial address required by the terms of the servicing agreement that USMS entered into with Coinbase in June. Given the…
— Scott Johnsson (@SGJohnsson) August 16, 2024
Earlier that month, a U.S. government wallet paid 10,000 BTC to crypto trading site, Coinbase Prime. U.S. officials reportedly transmitted the Bitcoin stack to a wallet called “bc1ql” two weeks ago, according to Arkham Intel.
Large-scale government cryptocurrency unloading has historically been demonstrated to significantly increase market volatility. This is demonstrated by the fact that, even though the price decline started prior to Coinbase Prime receiving the stolen Silk Road assets, Bitcoin prices fell 3.6% as soon as the news broke.
It was revealed in July that Coinbase was thought to be the beneficiary of the $2 billion in Bitcoin that the US government also transferred. Shortly after former President Donald Trump declared his intention to establish a strategic Bitcoin reserve, the transfer took place.
The first contemporary darknet market, Silk Road was established in 2011 by Ross Ulbricht, an online criminal who went under the alias “Dread Pirate Roberts.”
The Federal Bureau of Investigation deactivated the Silk Road website in October 2013 and took Ulbricht into custody. In addition to earlier convictions, he is presently receiving a life term for conspiracy to conduct money laundering and narcotics distribution.
In May 2024, Donald Trump offered to free Ulbricth from prison should he win the president.
