Alex Thorn of Galaxy Digital Emphasizes the Transformative Potential of Derivatives for the Bitcoin Market

Alex Thorn, head of research at Galaxy Digital, on Tuesday emphasized the transformative potential of derivatives for the Bitcoin market

Galaxy Digital’s Head Of Research On Bitcoin Options, Institutions, And Volatility

Head of research at Galaxy Digital, Alex Thorn, highlighted the transformative potential of derivatives for the Bitcoin market, particularly with the launch of options on BlackRock’s iShares Bitcoin ETF (NYSE:IBIT) on Nasdaq.

What Happened: Highlighting the significant impact derivatives could have on Bitcoin (CRYPTO: BTC) liquidity and institutional participation, he told Bloomberg on Tuesday, “All other markets—commodities, equities—the derivatives markets are orders of magnitude larger than spot markets.”

“You can imagine if we get into a bull market… those options could be really impactful,” he added.

Speaking with Bloomberg, Thorn pointed out that options provide institutions with more sophisticated tools to hedge and manage risk.

Unlike futures, options offer flexibility and granularity, making them a preferred instrument for certain strategies.

The new onshore options market could also attract retail investors, who account for 44% of U.S. equity options trading but have had limited access to Bitcoin derivatives.

Thorn suggested the potential for broader adoption, saying, “I would be surprised if these options don’t become accessible to retail platforms like Robinhood soon.”

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Why It Matters: The introduction of options on IBIT comes as Bitcoin made a new high of $93,639 on Tuesday afternoon, according to CoinGecko data.

Thorn pointed out that the additional liquidity from options markets could help reduce Bitcoin’s volatility over time.

“As volatility comes down, people can take larger position sizes, and you should see Bitcoin become more stable,” he noted. This stabilization could encourage more institutions to enter the market, bolstering Bitcoin’s role as a financial asset.

Thorn also addressed the ongoing debate around Bitcoin as a safe-haven asset amid geopolitical tensions.

While some still view Bitcoin as a high-risk investment, he argued that its global liquidity and trading activity make it increasingly resilient.

“Over time, as it’s more widely held, Bitcoin’s volatility will decrease, and its use case will extend beyond being a speculative asset,” he concluded.