Today «unprecedented opportunities were unlocked» for bitcoin, says the analyst. For Consorti, «the financial future of bitcoin is just beginning.» Today, November 19, 2024, the first options on the IBIT bitcoin (BTC) ETF, issued by the BlackRock company, were launched on the US Nasdaq stock exchange. As BitcoinDynamic reported this morning, the launch will greatly favor institutional and corporate investment in these ETFs. For Joe Consorti, a market analyst specialized in bitcoin (BTC) and macroeconomics, the fact has a much greater magnitude than many may assume. Consorti said yesterday, when there was speculation that the launch could take place today: «The doors for the next evolution of bitcoin in the financial markets are about to open. “So tomorrow, November 19, marks a pivotal moment for the integration of bitcoin with traditional finance, with the launch of bitcoin spot ETF options, specifically for the IBIT vehicle.” Adds the specialist who «This event inaugurates a new era in price dynamics, volatility and institutional adoption». And why so much enthusiasm for the launch? For this it is necessary to understand the importance of derivatives of financial products. Consorti explains that “derivatives, such as options, are the foundation of capital markets, providing liquidity, price discovery and risk management tools for participants, especially for institutional actors who represent the core of the market.” . Until now, bitcoin was a laggard when it comes to the derivatives market, but everything changes with the options on the bitcoin ETF issued by BlackRock (which, in the future, could perhaps expand to other bitcoin ETFs).
«This is important, and it is enormously important, because in traditional markets derivatives are 10 to 20 times the size of the underlying market capitalization. Compared to bitcoin, where listed derivatives represent less than 1% of the spot market capitalization, the disparity is evident. Joe Consorti, financial analyst.
The specialist adds that «the market capitalization of spot bitcoin is approximately 1.8 trillion dollars, but if we add the open interest in the options market, which is approximately 20 billion, plus 2 billion from the CME and perpetual swaps With open interest of 16 billion, we get a derivatives to spot market ratio of about 1%, if not less, while bitcoin is now at $90,000. This means, according to Consorti, that “bitcoin derivatives are underdeveloped, and this limits the maturity of the market because there is enormous institutional demand from a hedging and allocation perspective.” Until now, bitcoin derivatives were traded on offshore markets or outside regulated securities markets (for example, on the Deribit exchange). That limited, until today, institutional participation in this market. For this reason, “the inclusion of options on bitcoin ETFs changes everything, introducing bitcoin to the world's largest capital market and unlocking unprecedented opportunities, such as greater liquidity and depth,” says Consorti.
“This will significantly expand the investor base and enable a robust derivatives ecosystem to reduce volatility, improve price discovery and allow institutional capital to participate at scale. The introduction of options on bitcoin ETFs is not just about a new product, but about transforming the market. “As derivatives markets grow, bitcoin will follow the path of stocks and commodities, where derivatives are 10 to 20 times the size of the spot market.” Joe Consorti, financial analyst.
According to the specialist, bitcoin “is in the first stage of its monetization process”. Now, the doors are open to “the largest and deepest sources of liquidity on the planet.” Therefore, Consorti encourages his audience to prepare because — according to him — “the financial future of bitcoin is just beginning.”