CoinDesk 20 Index: 3,444.52 +6.86%
Bitcoin (BTC): $96,257.72 +6.18%
Ether (ETH): $3,194.38 +5.2%
S&P 500: 5,836.22 +0.16%
Gold: $2,670.41 +0.41%
Nikkei 225: 38,474.30 -1.83%

Bitcoin's rebound continued throughout the Asian and European mornings, with BTC climbing over 8.5% to $97,350 from its drop below $90,000 on Monday. Crypto markets started the week deep in the red as banks like JPMorgan and Goldman Sachs scaled back their expectations of rate cuts by the Fed in the near future. However, the downward trend was short lived with crypto majors enjoying a swift recovery. Bitcoin trades about 6.5% higher in the last 24 hours at around $96,500, while the broader market has risen nearly 7%, as measured by the CoinDesk 20 Index.

BTC's swift recovery from below $89,000 may suggest its period of weakness may have run its course. Having been driven lower by scaled back expectations of Fed rate cuts this year, BTC surged back to $94,000, leaving behind a classic "long-legged Doji candle." The long wick signifies downtrend exhaustion, indicating that although sellers initially drove prices lower, buyers ultimately overpowered them. This pattern is often seen as a potential signal of a bottom, mainly when it occurs at key support levels or after a notable price drop, as is the case for BTC. It is the inverse of BTC's correction on Dec. 16, when the bulls failed to keep prices at record highs above $108,000, as the uptrend ran out of steam and sellers reasserted themselves.

Bitcoin continues to get further entrenched into the traditional finance system, with Intesa Sanpaolo, Italy's largest bank by assets, having bought 11 BTC for over $1 million. Reuters saw an internal message that said, "As of today, Jan. 13, 2025, Intesa Sanpaolo owns 11 bitcoins". Intesa Sanpaolo currently has a market capitalization of roughly $73 billion, putting it at 247 out of the top 250 most valuable companies. The share price is slightly higher today, up over 2%. Intesa has had a proprietary trading desk in place for the past few years and also handles spot trading for other cryptocurrencies, according to Reuters' report.

The U.S. SEC-approved options tied to BlackRock's spot bitcoin ETF (IBIT), which debuted on Nov. 19, are already almost half the size of Deribit's eight-year-old bitcoin options market.

On Monday, there were 2.16 million open or active IBIT options contracts, representing a notional value of $11 billion, according to data source optioncharts.io. The tally equates to 50% of the $23 billion locked in the open BTC options on Deribit at press time. One option contract on Deribit represents one BTC.

Similar to traditional markets, traders leverage crypto options to speculate on or hedge against price movements, volatility, and the effects of time.

"With BlackRock's spot Bitcoin ETF as its underlying asset, IBIT options appeal not only to institutional investors but also U.S. retail traders who favor regulated markets. This rapidly expanding segment is evident in the increasing demand for IBIT options," Volmex Finance, a crypto derivatives protocol, told CoinDesk in an email.

Volmex added that the growing popularity of IBIT options is challenging Deribit's dominance in the crypto options market.

- Omkar Godbole