Traditional financial instruments cushion volatility and attract institutional investors to Bitcoin — a sign of market maturation.
Derivatives products, like options contracts — financial instruments that give investors the right but not the obligation to buy or sell an asset at a pre-determined price — will drive the Bitcoin (BTC) market capitalization to at least $10 trillion, according to market analyst James Van Straten.
Van Straten said that options and other derivatives attract institutional investors and cushion markets from the high volatility that is a hallmark of digital assets.
He pointed to open interest for BTC futures on the Chicago Mercantile Exchange (CME), the world's largest derivatives marketplace, as evidence of a shift. Van Straten wrote:
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