Analyst: Options and derivatives may push Bitcoin's market value to $10 trillion

Odaily Planet Daily reports that market analyst James Van Straten believes that derivatives such as options contracts will drive Bitcoin's market capitalization to at least $10 trillion. He believes that derivatives will not only attract more institutional investors but also effectively mitigate the inherent volatility of the digital currency market. Van Straten cites the record-breaking open interest in Chicago Mercantile Exchange (CME) Bitcoin futures as an example of a significant shift in market structure.

He analyzed that this phenomenon is partly due to the widespread use of systematic volatility selling strategies (such as covered call options), reflecting the increasing liquidity and maturation of the Bitcoin derivatives market. He also pointed out that reduced volatility has a two-way impact: while it can alleviate the sharp declines common in the crypto market, it will also reduce the high-yield surges that investors are accustomed to.