The rise of bitcoin options trading has opened new doors for investors, adding a level of flexibility and strategy that goes beyond simply buying and holding digital assets.

Roundtable anchor, Rob Nelson, alongside Paul Giordano, V.P. of Digital Asset Management at Marathon Digital, discussed the increasing integration of bitcoin into the traditional financial (TradFi) landscape, particularly through the growth of derivatives like options.

Rob Nelson kicked off the conversation by asking, "Are we now moving bitcoin into the space of being an actual tradable commodity, just like other mainstream TradFi assets?"

Paul Giordano responded by highlighting the versatility bitcoin options offer traders. “Bitcoin itself is very, very heavily traded,” Giordano said. He explained how bitcoin is already being widely transacted, but the introduction of ETFs has brought it more firmly into traditional financial settings. “The ETF has brought the properties of bitcoin into the traditional financial world," he noted.

Giordano further emphasized how the options market enhances traders' control. “It just adds more ability to manage your exposures," he explained, adding that options enable investors to enter and exit positions more quickly. "You don't have to pay for a hundred percent of the cost of these options because a lot of them are out of the money," he said.

Not everyone in the bitcoin space is convinced it's necessarily a fully positive development, however. Former Wall Street executive turned Custodia Bank founder Caitlin Long warned an increasingly large bitcoin options market could weigh on spot bitcoin price — or potentially lead to shell games that have plagued traditional finance.

The issue with such layered financial products is that they can create feedback loops between the derivative price and the underlying spot price. “There’s a lot of leverage on the derivative itself, and there’s even more coming now with options,” she continued. “So the question is, which came first? The chicken or the egg? What drives the spot price?”

On the plus side, Giordano concluded that bitcoin options provide traders with more tools to manage risk and adjust their positions effectively, further deepening bitcoin’s role within both digital and traditional financial systems.