Options Growth Will Ignite Innovation in the Bitcoin Market – But Not in the Way You Thi…

Richard Rosenblum is co-founder and co-head of trading at crypto liquidity provider GSR. The opinions below are the author’s and do not reflect the position of CoinDesk.

Like futures, the launch of bitcoin options on major exchanges has been met with anticipation.

Hopeful observers believe the CME’s and Bakkt’s entry into the burgeoning options market will further encourage institutional participation. It will – but not necessarily in the way they expect.

For major institutions, miners and other corporates involved in the space, options open a new, powerful tool for managing risk and volatility. But, as we can see from other financial markets, these capabilities won’t come from the listed options themselves. Instead, the real action will take place in over-the-counter hedges. While these corporate-focused products will rely on vanilla option liquidity, they will move volumes on exchanges.

Before we explain why this is the case, it’s worth highlighting the growing demand for…