The U.S. Securities and Exchange Commission has approved options tied to BlackRock's spot bitcoin ETF, which could draw institutions to the crypto market. Bitwise Asset Management believes that the debut of the options could lead to a gamma squeeze and a rapid price rally in bitcoin, similar to what happened with GameStop this year. However, Greg Magadini, director of derivatives at Amberdata, believes that increased institutional participation through the ETF and ETF options will likely dampen volatility over the long run. Magadini also noted that institutional flows tend to have an impact on implied volatility, with upside implied volatility picking up when investors buy calls and dampening when they sell covered calls. Overall, Magadini believes that institutional adoption will lead to lower volatility in bitcoin.



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