In today’s newsletter, Dumpling Bullish, independent digital asset commentator, writes about the growing influence of bitcoin’s derivatives stack on its price.

Then, in Ask an Expert, Leo Mindyuk from ML Tech, answers questions about the evolution of bitcoin investment products.

– Sarah Morton

Bitcoin price discovery: no longer just a demand story

For most of its history, bitcoin had a simple pricing logic: limited supply, growing demand and the occasional panic in between. That logic still exists. It just no longer runs the show.

What runs the show now is the derivatives stack sitting atop the asset.

From spot market to leverage system

Over the past decade, bitcoin has moved from a predominantly spot-driven market into a layered derivatives ecosystem. Futures, perpetual swaps, options, exchange-traded funds (ETFs), structured products and prime brokerage lending have transformed the way price discovery occurs.

CME futures launched in December 2017, giving institutions a regulated, scalable way to short bitcoin for the first time and providing a mechanism to express bearish views at the top of what had been a 19x run. The asset saw an 80% drawdown. That did not kill bitcoin. It allowed disagreement to be priced more efficiently.

Then came the 2024 ETF approvals, acting as the foundation for a new derivatives layer inside U.S. equity markets.

Each addition didn’t change what bitcoin is. It changed where and how its price gets discovered.

Three variables that now matter most

Real yields and dollar strength set the macro backdrop. Bitcoin has increasingly traded as a high-beta liquidity asset and when global risk appetite contracts, it sells off alongside equities and other risk assets, regardless of what the blockchain is doing.

Bitcoin 30-day rolling correlation with Nasdaq (QQQ), 2011 – present
Source: Newhedge

Derivatives positioning tells the short-term story. CME open interest and perpetual funding rates reveal whether a price move is built on genuine new demand or on leveraged speculation that will eventually unwind violently. When funding rates run persistently positive, the market is paying a premium to be long — and that premium is a fragility signal.

Bitcoin CME futures open interest and price, Dec 2017 – present
Source: CME Group via TradingView

ETF options mechanics have introduced a new transmission channel. When institutional investors buy calls or puts on the iShares Bitcoin Trust ETF (IBIT), dealers who sell those options must hedge by trading the underlying ETF and, in some cases, related futures or spot exposure. This hedging is procyclical. When Bitcoin rises, dealers must buy more; when it falls, they must sell. Modest directional moves get mechanically amplified. The result is that a meaningful share of Bitcoin’s short-term volatility is now generated mainly by equity market structure.

Financialization is not extinction

Gold offers a useful parallel. The development of futures and ETFs did not eliminate gold’s scarcity. It integrated gold into global macro portfolios and amplified its volatility during liquidity cycles. Bitcoin is undergoing a similar integration process at a faster pace. It is being absorbed into the global risk budget system. That absorption brings institutional capital, liquidity, and legitimacy. It also brings correlation, reflexivity, and the occasional violent unwind driven by forces that have nothing to do with the protocol.

Scarcity remains intact at the protocol level. But its influence on price is increasingly subordinated to the cost of capital and the mechanics of the derivative stack. Bitcoin is not losing its scarcity narrative. It is gaining a liquidity identity.

Scarcity anchors the asset. Liquidity sets the marginal price.

– Dumpling Bullish, independent digital asset commentator

Ask an Expert

Q: Over the past few years, bitcoin investment products have expanded from spot exposure to futures, options and ETFs. How do you see the evolution of bitcoin financial products shaping the way investors access the asset?

The evolution of bitcoin investment products mirrors the path we’ve seen in traditional asset classes. Early participants primarily accessed bitcoin through direct ownership — buying and holding the asset itself on crypto exchanges. Over time, as institutional interest increased, the market began developing a broader toolkit: regulated futures and options, structured products and regulated fund structures and more recently, spot ETFs.

This expansion is important because it changes bitcoin from simply being a speculative asset to something that can be integrated into portfolio construction and risk management frameworks. Different investors have different needs. Some want direct exposure to the asset’s price movement, while others want regulated vehicles, derivatives for hedging or ways to express more nuanced market views.

As the ecosystem matures, financial products make Bitcoin easier to access through familiar structures, which lowers barriers for institutional investors and broadens the ways the asset can be incorporated into diversified portfolios.

Q: In traditional markets, financial products often evolve from simple exposure to more complex structures like leveraged, inverse, and derivatives-based strategies. Are we starting to see a similar progression in the bitcoin ecosystem?

Yes, and it’s a natural progression. In most asset classes, markets begin with simple spot exposure and gradually develop layers of financial instruments that allow investors to manage risk, hedge positions or express different market views. Bitcoin is following that same trajectory.

Initially, the focus was simply on gaining exposure to the asset itself. Today, we’re seeing a more developed ecosystem that includes derivatives, volatility trading and structured products. These tools allow investors to do much more than just speculate on price appreciation. They can hedge downside risk, trade volatility or construct market-neutral strategies.

What’s interesting is that crypto markets often evolve faster than traditional markets because the infrastructure is digital and global. As liquidity deepens and regulatory frameworks become clearer, we’ll likely see even more sophisticated products emerge that resemble strategies commonly used in equities, commodities and fixed-income markets. For example, I expect growth in various income-generating ETFs — instruments for inversed, leveraged or broader crypto factor-based exposure. Moreover, we will likely see a tremendous growth in crypto option markets.

Q: With the growth of futures markets and the introduction of spot ETFs, how might the next generation of bitcoin products expand investor use cases, whether for hedging, leverage, or more sophisticated portfolio strategies?

Futures markets already allow investors to hedge exposure or express directional views without holding the asset directly. ETFs have made bitcoin accessible through traditional brokerage accounts. The logical next step is products that focus on portfolio outcomes.

As that happens, bitcoin starts to look less like a standalone trade and more like a portfolio building block. That’s ultimately where the market is heading: giving investors the flexibility to express views on the market in much more nuanced and sophisticated ways with the ease of access.

– Leo Mindyuk, CEO & CIO, ML Tech

Keep Reading

Key Takeaways

• Opera proposes replacing cash arrangement with 160M CELO token allocation
• Request represents approximately 27% of current circulating supply
• MiniPay’s 14M+ registrations justify expanded network participation
• Voting power capped at 10% to preserve decentralized governance structure
• Strategic pivot reflects Opera’s deepening commitment to blockchain payments

Opera Limited (OPRA) stock traded around $14.40 following a minor pullback, while the browser company unveiled plans for a substantial cryptocurrency arrangement with Celo. The firm has submitted a governance request to exchange its existing cash-based agreement for a significant token position. This transition could establish Opera among Celo’s most influential network participants.

Opera Limited, OPRA

Browser company transitions from cash payments to long-term token ownership

Opera has presented a formal governance petition requesting 160 million CELO tokens distributed across a three-year timeline. The arrangement would eliminate quarterly cash disbursements in favor of direct token ownership. This structural change creates stronger alignment between Opera’s financial interests and the blockchain’s success.

The proposed allocation accounts for approximately 27% of CELO’s currently available circulating tokens. Additionally, it comprises roughly 16% of the cryptocurrency’s maximum capped supply. The substantial size of this request demonstrates Opera’s intention to establish a meaningful presence within the ecosystem.

CELO was trading near $0.07 during reporting hours, significantly below its 2021 all-time highs. Despite current valuations, the token allocation provides considerable upside potential should market conditions improve. Consequently, Opera’s strategy balances forward-looking opportunity with present-day market realities.

Decentralization safeguards and treasury mechanics structure token distribution

The governance proposal details a single transfer from Celo’s unreleased token reserves to an Opera-managed wallet. This arrangement formalizes the browser company’s transition to long-term ecosystem participant. The mechanism replaces ongoing payments with consolidated token ownership.

The framework restricts Opera’s governance participation to maximum 10% of total staked CELO under standard circumstances. This limitation safeguards the network’s decentralized decision-making processes. Emergency situations may permit temporary adjustments to these restrictions.

Token holder consensus remains essential before implementation, as community members will evaluate the proposal through established governance procedures. Stakeholder feedback will determine whether the allocation magnitude receives approval. The final decision will establish Opera’s authority and influence within Celo’s governance framework.

Wallet platform success drives Opera’s strategic positioning within payment network

Opera grounded its token request in MiniPay’s demonstrated performance, its self-custody digital wallet developed on Celo infrastructure. The application enables peer-to-peer stablecoin transfers using simple phone number identification. It further accommodates regional payment systems across diverse geographical markets.

MiniPay has accumulated over 14 million user registrations following its 2023 introduction. The platform has facilitated more than 420 million transactions spanning across 66+ countries worldwide. These metrics underscore its significance in generating network engagement and activity.

Opera intends to enable over 50 million users to convert rewards into USDT directly through MiniPay. This feature integration may accelerate wallet adoption and transaction throughput. Through these developments, Opera reinforces both operational and economic ties with Celo.

Opera shares registered near $14.60 during recent trading following a modest decline. The organization continues broadening its cryptocurrency involvement through product development and direct token ownership. The pending agreement could fundamentally transform its standing within blockchain-powered payment systems.

• Zcash price was down nearly 10% in the past 24 hours.
• The ZEC token changed hands at around $239 as bulls risk a key support level.
• Is the dip a healthy consolidation move or the start of a deeper correction?

Zcash (ZEC) pulled back sharply on Thursday, falling nearly 10% in intraday performance as the surge to a multi‑month high near $280 risked fading.

The privacy coin traded to lows of $239, with the retreat coming amid a broader risk‑off shift in crypto markets.

Profit‑taking across the board means ZEC’s recent breakout could fuel bears’ move towards a key psychological support at $230.

Can bulls hold onto support levels, or is Zcash price poised for an even deeper correction?

Why is the Zcash price down today?

Zcash’s slide from the $280 level reflects a combination of several short‑term factors.

Broadly, it’s the investor jitters around the global macro and geopolitical environment.

Bitcoin, for instance, is struggling to hold gains above $70k, and a similar outlook is engulfing top altcoins, including Ethereum, Solana, BNB, and XRP.

A key perspective is the profit‑taking amid heightened macro uncertainty.

ZEC outlook amid key network growth metrics

Zcash price has shown resilience amid interest in privacy coins, with a recent spike to $280 aligning with this sentiment amid Zodl’s milestone.

Despite the pullback to $239, bulls remain positive as on-chain metrics outline notable network growth.

For instance, Zcash’s hashrate has hit a new all-time high of 16.54 GS/s.

Meanwhile, shielded supply has climbed to 5.15 million ZEC, accounting for roughly 31% of the coin’s circulating supply.

A surge in shielded supply indicates growing demand for private transactions.

Importantly, a sizable portion of ZEC is off crypto exchanges, which signals a long-term bullish view.

The robust network security and increased interest in privacy-focused transactions offer a two-pronged approach to adoption, and could boost ZEC price.

Zcash price technical picture

From a technical standpoint, ZEC’s daily chart points to a mixed outlook with oscillators and moving averages leaning neutral-to-towards selling.

The current structure suggests risk appetite could allow for a clean breakout to $300.

In this case, bulls must flip $240 into a major support base, with the 50 EMA at $262 crucial.

Further upside movement will bring the 200 EMA ($281) into view.

Above these levels lie $300 and the 100 SMA at $339, which could be a key resistance zone as bulls eye the $500 target.

Zcash’s sharp pullback after the spike to $280, therefore, provides bulls with an opportunity to pump amid a shakeout of weak hands.

However, if short‑term selling gains momentum amid broader crypto weakness, the coin’s price could fall to $206 and then $185.

Security researchers have raised concerns about a Coinbase-associated Commerce page that appeared to prompt users to enter wallet recovery phrases, warning that such a flow could normalize behavior commonly exploited in phishing scams.

The page has circulated widely on social media after being flagged by the founder of the blockchain security platform SlowMist, Yu Xian, widely known as Cos.

“I’m really puzzled why Coinbase would have a page like this, directly asking users to input their plaintext mnemonic phrases for asset recovery,” Yu wrote in an X post on Wednesday, adding: “Such an insecure practice is simply unbelievable.”

Coinbase has yet to address the issue publicly. The company told Cointelegraph it was looking into the matter and did not provide additional information. Cointelegraph also approached Yu Xian for comment, but had not received a response by publication.

Recovery phrases give full control over a self-custody wallet and should never be shared with third parties, customer support agents or untrusted websites. They are normally used only in trusted wallet recovery or import flows.

Coinbase referred to the subdomain as a commerce “withdrawal tool”

According to blockchain sleuth ZachXBT, the page in question was referenced in a Coinbase Help guide related to its Commerce product.

The guide, now appearing to have been removed, reportedly outlined an option for users to recover funds by importing their seed phrase into a compatible wallet such as Coinbase Wallet or MetaMask. It also directed users to a withdrawal tool hosted at the same subdomain that has drawn scrutiny.

The help documentation also emphasizes that Commerce wallets are self-custodial, meaning Coinbase does not have access to users’ seed phrases and cannot recover funds if they are lost.

Related: OpenClaw devs targeted by phishing scam promising free ‘CLAW’ tokens

“So basically Coinbase has an official page live threat actors can use to target Coinbase users via seed phrase social engineering if they wanted?” ZachXBT wrote on X.

Coinbase advises against pasting seed phrases into any website

It remains unclear whether the page in question was the result of a technical error or another issue on Coinbase’s side.

In another guide, Coinbase strongly advised users to never paste seed phrases into any website.

On Tuesday, Coinbase warned that scammers are posing as customer support over the phone or online to steal login information and verification codes. The company said it will never reach out, directing users to its official channels on X and Reddit.

Magazine: Bitcoin’s ‘narrative vacuum,’ Ethereum now inevitable: Trade Secrets