Bitcoin Derivatives Expected to Drive Market Cap to $10 Trillion

According to PANews, market analyst James Van Straten has highlighted the potential impact of derivatives like options contracts on Bitcoin's market capitalization, predicting it could reach at least $10 trillion. Van Straten suggests that derivatives can attract more institutional investors and mitigate the inherent high volatility risks of the digital currency market. He cites the record high open interest in Bitcoin futures at the Chicago Mercantile Exchange (CME) as evidence of significant shifts in market structure. Van Straten attributes this development partly to the widespread use of systematic volatility selling strategies, such as covered call options, which indicate enhanced liquidity and maturity in the Bitcoin derivatives market. He notes that reduced volatility has a dual effect: while it can alleviate the frequent sharp declines typical in the crypto market, it may also lead to fewer instances of the high-yield surges investors have become accustomed to.