Bitcoin Options Approval Will Increase Price Volatility

In response to the NYSE and CBOE options approval for Bitcoin spot ETFs, The Block quoted several experts as saying that “the introduction of options on Bitcoin spot ETFs is likely to increase volatility.” Ed Tolson, CEO of crypto hedge fund Kbit, said: “It seems likely that retail investors will use the options on the BlackRock BTC Spot ETF (IBIT) primarily for speculative purposes. They may buy when the price rises and sell when it falls, adding to volatility.” Michael Harvey, Head of Franchise Trading at Galaxy Digital, added: “Initially, we expect retail investors to outnumber institutional investors, which could lead to higher volatility in the short term. However, over time, volatility may decrease as institutions adopt monetization strategies such as volatility selling. The interests of speculators and hedgers will be balanced, creating a more liquid market.”