The Cryptocurrency market has reached a new milestone with the start of options trading on Bitcoin ETFs, marking a crucial step towards institutional adoption of this digital asset. The launch, led by BlackRock and its iShares Bitcoin Trust (IBIT)puts Bitcoin on par with traditional assets like stocks and bonds in terms of financial sophistication.
BlackRock and Bitwise at the forefront
BlackRock’s iShares Bitcoin Trust (IBIT), with nearly $45 billion in assets under management, was the first ETF approved for options by the SEC in September. Trading officially began on Tuesday, while the Bitwise Bitcoin ETF (BITB) will follow on Wednesday, Bitwise CEO Hunter Horsley confirmed.
We expect options on the Bitwise Bitcoin ETF ( $BITB ) to begin trading Wednesday.
BITB traded around $115M of volume today, with AUM near $4B.
As ever, the public addresses allowing investors to verify the Bitcoin holdings are published on the ETP website and 10% of gross…
— Hunter Horsley (@HHorsley) November 19, 2024
With over $500 billion in trading volume since their debut in January, Bitcoin ETFs have proven to be a significant catalyst for the market. Options, in particular, provide essential tools for institutions looking to manage risk and retail speculators interested in taking advantage of the asset’s volatility.
Impact on the market and future expectations
The price of Bitcoin, which was trading around $91,500 at the close, has grown almost 40% in the last month, boosted by the election of Donald Trump, a pro-crypto president. Experts anticipate that Bitcoin could surpass $100,000 in the next two months.
Eric Balchunas, senior ETF analyst at Bloomberg, noted that the first day of IBIT options trading had already generated “hundreds of millions” in volume, with a predominant focus on calls. This reflects bullish sentiment among investors, especially in contracts such as the Dec20th C100which is betting on a doubling of the price of Bitcoin in the next month.
New strategies and ecosystem development
The success of options on ETFs has triggered a wave of new product requests, including options-based strategies like covered call ETFs and buffer ETFsaccording to Nate Geraci, president of ETF Store. Grayscale also filed an updated prospectus for its Bitcoin Covered Call ETFdesigned to provide additional income through options contracts.
David LaValle, Global Head of ETFs at Grayscale Investments, welcomed this development: “Client demand for Bitcoin ETPs is unprecedented, and the Grayscale team is proud to offer a range of products that promote investor choice and provide exposure. convenient to the crypto ecosystem.
Conclusion
The debut of options on Bitcoin ETFs marks an important step in the evolution of the crypto market. This development not only improves liquidity and risk management, but also solidifies Bitcoin’s position as a key asset for institutional and retail investors alike.
With the continued growth of financial infrastructure, Bitcoin continues to attract global interest, establishing itself as a pillar of modern finance.
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