BTC ETF Derivatives Creates Huge Inflow Potential For the Crypto Market

• The traditional asset derivatives market is much larger than the spot market.
• Crypto’s derivatives market is much smaller than its spot market.
• The minimal derivative market size in crypto creates room for significant growth.

Jeff Park, Head of Alpha Strategies, says that, unlike in traditional finance, the crypto derivatives market is much smaller than the spot market, accounting for less than 5% of it.

Park’s statement comes shortly after the SEC approved Bitcoin ETF Options trading for several products. The SEC announced it approved BTC ETF Options for the Cboe exchange to offer options on the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB). 

Read also: SEC Approves Bitcoin ETF Options on NYSE: A New Era for Crypto Traders

The Commission also granted permission to the New York Stock Exchange (NYSE) to list options on the Grayscale Bitcoin Trust ETF (GBTC), Grayscale Bitcoin Mini Trust (BTC), and Bitwise Bitcoin ETF (BITB). 

Bitcoin analysts see this as a bullish development, opening new opportunities for institutional investors. Park highlighted the potential for significant growth in the crypto derivatives market, citing the size of traditional derivatives markets.

Comparing Traditional and Crypto Derivatives Markets

For instance, the Alpha Strategies Head noted that the U.S. equities market is worth about $50 trillion, while the derivatives market is about ten times more. Judging by this trend and the current state of the crypto derivatives market, the analyst foresees a huge potential for growth in the newly launched crypto market sector.

Meanwhile, Bitcoin has regained its bullish momentum since last week, displaying significant volatility. The cryptocurrency surged 10.31% in the last seven days and traded for $70,814 at the time of writing, according to data from TradingView. The recent rally has moved the flagship crypto above the crucial $70,000 price level, with several analysts predicting it would retest and potentially overcome the all-time high, opening the way for higher levels and triggering a parabolic bull run.