Bitcoin’s trademark volatility may be entering a new stage due to the SEC (SEC).
According to NYDIG Research, the agency decided to raise the position limits for most Bitcoin ETFs to choose, which could help smooth out price volatility by encouraging strategies such as Coved Call Call Sell, which limits the rise in exchange for steady revenue.
As regulators, IBIT options trading position restrictions have increased Approved in-kind redemption For dot bitcoin ETFs.
NYDIG wrote that by having traders hold ten times the contracts they had before, the SEC opened the door to more aggressive and ongoing options activity. Especially large-scale power supply strategies, especially the most suitable ones.
They are designed to earn profits from existing holdings by selling upside exposure, which, if done in large portfolios, naturally suppresses price movements.
Bitcoin’s volatility is already falling, deribit’s BTC volatility index (DVOL) Over the past four years, it has shown a steady decline from around 90 years old.
Still, it stands out compared to bonds, stocks and other traditional assets. This is an attractive goal for investors who are trying to collect revenue from market volatility and effectively harvest volatility, but it also has risks for institutions that require stable exposure.
“As volatility declines, assets become more invested for institutional portfolios seeking to balance exposures. This dynamic could strengthen on-site demand,” NYDIG analysts wrote.
Ray Dalio is one of the earliest champions of such risk-value strategy, recently proposed Allocated to 15% of gold and cryptocurrency At debt levels rise.
“The feedback loop of reduced volatility leads to an increase in spot purchases that could be a strong driver of ongoing demand,” the company concluded.
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