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On Tuesday, January 30th, Greg Magadini, Director of Derivatives, Amberdata; Euan Sinclair Strategic Advisor, Amberdata; and Giovanni Vicioso, Executive Director Equity and Alternative Products, CME Group, joined Blockworks moderator Ren Kong to explore the evolving landscape of Bitcoin with a focus on institutional demand. The discussion included an analysis of market dynamics, the intricacies of options pricing and the significance of a spot ETF for Bitcoin and its implications on the broader cryptocurrency market.

 

Overview

 

In 2023, Bitcoin once again demonstrated its resilience as an investable asset, delivering a +250% return and outperforming other major asset classes. Notably, a substantial portion of this gain was achieved during periods of heightened volatility, highlighting Bitcoin’s unique characteristics. 

The discussion began by examining Bitcoin’s reaction to two major events - the SVB banking crisis and the October attacks, proving Bitcoin to be an “alternative money play”. The team dove into the role of Bitcoin in a portfolio and how it compares with traditional assets in terms of returns, volatility and correlation. The team leveraged Amberdata’s recent report, Bitcoin’s Next Frontier: Institutional Demand in the World of Options & Futures Trading, to analyze institutional interests and participation in the space. 


The team showed that in 2023, there was a notable emphasis on venue consolidation, particularly post-FTX, resulting in a more robust foundation for institutions to leverage. Cryptocurrency options gained increasing attention with Deribit achieving new notional open interest highs and regulated platforms like CME with futures open interest surpassing any Centralized Finance (CeFi) venue, an unprecedented achievement. These trends indicated both new institutional market entrants and additional sources of market participation.

This was truly an interesting session leveraging the entire team’s deep digital asset and trading backgrounds.

A recording of the full discussion is available here.

 

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