Bitwise Alpha's Jeff Park Predicts Explosive Bitcoin Price Surge Following SEC Approval of BlackRock Spot Bitcoin ETF Options Trading

Jeff Park, Head of Strategy at Bitwise Alpha, posted on X (formerly Twitter) that the SEC's approval of BlackRock's spot Bitcoin ETF options trading will likely lead to a massive surge in Bitcoin's price. Park believes this will be the most incredible "volatility" surge in financial history, and it deserves further explanation. This prediction is based on several factors: the unique characteristics of Bitcoin, the nature of the regulated options market, and the powerful combination of the two.

Park argues that the SEC's approval signifies a major milestone for the cryptocurrency market. For the first time, Bitcoin's nominal value will be "partially banked" through ETF options. While the limited supply of non-custodial Bitcoin is its biggest advantage, it also acts as a constraint, limiting the creation of synthetic leverage. Now, Bitcoin will have a regulated market for the first time, with the Commodity Futures Trading Commission protecting clearing members from counterparty risks. This implies that synthetic nominal exposure in Bitcoin could grow exponentially.

Furthermore, Bitcoin exhibits a unique volatility characteristic: volatility increases as the spot price rises. This means delta increases at a faster rate. When traders selling gamma hedge their positions (during gamma squeezes), the situation becomes explosively recursive in Bitcoin. Short-selling traders are forced to buy back at higher prices, leading to further price increases. Negative vanna-gamma squeezes can propel Bitcoin prices skyward.

In summary, the Bitcoin ETF options market represents the first time the financial world has witnessed regulated leverage on a truly supply-constrained, perpetual commodity. Things could get wild, possibly even forcing the regulated market to shut down. However, the extraordinary aspect of Bitcoin is that there will always be a parallel, decentralized market that cannot be shut down, unlike equities.