Bits + Bips: Why Bitcoin Has the Least to Gain From the Clarity Act

**Laura Shin** (0:00)
You're listening to a brief segment from one of the Bits and Bips episodes this week. The full show is now only available on its own dedicated Bits and Bips channels. So be sure to go to X, YouTube, and your favorite podcast platform and search for Bits plus sign Bips, spelled B-I-P-S, and subscribe.

**Steven Ehrlich** (0:21)
We were just talking about your BIV index, but one thing I find really interesting is that you have one specifically related to options on IBIT, which should have very little delta vis-a-vis Bitcoin itself, but the nature of financial products it does. I'm just curious, before we get into a couple of other assets, is there anything, is there any interesting divergence between your IBIT product and BIV?
And if so, what might that mean?

**Cole Kennelly** (0:50)
So we have the BIV index, as you mentioned, and the BIV US index. The BIV index tracks the global spot options market, Deribit, OKAX, it looks at these type of venues and kind of aggregates this single number that looks at the entire global options market. About six months ago, so BIV is about four years old now.
About six months ago, we rolled out the BIV US index on the back of the success for the IBIT options. And IBIT options launched at the end of 2024 in November and have quickly become the dominant form factor for Bitcoin options in the US market.
And so, the regulated ETF options market and the offshore market are roughly the same size. They're both about 25 billion on any given day recently. And basically, you can observe that the BIV index is a couple points below the BIV US index. This is largely attributed to small premium for really transparency and the clearing house setup of the equity options exchanges in the US market. So you'll think BIV US is at 42 and BIV is at 39, something like this. And so there is a small premium on the IBIT index, but largely the performance of the indices is very, very similar. And it's something that we pay close attention to. We've published a lot of research on the growth of the IBIT options market and something we're tracking closely. It's very interesting to juxtapose the two markets and two indices.

**Steven Ehrlich** (2:34)
Okay. And we spend a lot of time talking about Bitcoin, but as you mentioned in some of your earlier remarks, for every token has something at stake with the clarity negotiations, but I guess one could probably argue Bitcoin has the least given that it's pretty settled as a commodity and just sort of by design, it's rigid nature. There's less like on-chain activity you can do with Bitcoin beyond just sending it back and forth.
I want to kind of get your sense of what's happening with ETH, Solana, some of the other major ones where, I mean, aside from just perhaps getting a little bit of clarity on which regulator has primacy, there's a lot at stake in particular for DeFi and some of the sort of activities that you can do on top of these multipurpose blockchains. So are traders positioning themselves differently for these tokens related to Bitcoin? What does your platform tell you?

**Cole Kennelly** (3:32)
In general, I think that Bitcoin is bona fide and clearly under the CFTC's remit based on previous administrations and the regulatory seats and things that they've said. And so Bitcoin is very clearly a commodity. I think ETH is also very similar in that regard. But a lot of the things that are built on top of Ethereum and Solana stand to benefit and maybe things like Hyperliquid and lighter and other stand to benefit from the Clarity Act and the increased clarity in the ecosystem. I think that it's nebulous how certain things are regulated.
What is security? What is a broker? The Clarity Act brings transparency and clarity to those areas. I do think that Ethereum and Solana ecosystems, Hyperliquid have a lot to gain from this act, the statute going through.
It's very interesting to see how the market will react to that. I mean, you've seen in recent days that on a seven-day timeframe, Ethereum is up almost a percent, and Bitcoin is roughly up half a percent. So this might be indicative of the fact that Ethereum and other smart contract platforms, as well as other decentralized applications and exchanges have a lot to gain from the Clarity Act going through. So you might see this in the EVIV index. If I look real quick, the EVIV index is up around the same amount of percentage points as BIV, but you can definitely see this in the Ethereum price, in the Sol price, in the Hype price. So it's going to be interesting to see how the broader market reacts to clarity going through and the prospect of it going through.