The latest Bitcoin news talks about the possibility of the launch of crypto options ETFs on US exchanges by the beginning of 2025.
After the introduction of spot funds listed on the stock exchange in January 2024, allowing the influx of enormous institutional capital into the Bitcoin market, a new investment tool is about to arrive.
All this could contribute to the growth of the BTC price, potentially leading to the ambitious forecasts for 2025.
Let’s see all the details below.
Latest Bitcoin news: ETF options expected before 2025
A few months after the approval of spot Bitcoin ETFs, here are the latest crypto news talking about the opening of ETF options by 2025.
After hosting the start of trading for 12 different exchange-traded funds, now the regulators in the United States are thinking about the next investment tool.
According to experts, the options could arrive as early as the coming weeks, introducing a new bullish narrative in the market.
Following very likely also the ETF options on Ethereum will be launched on the United States ground. In particular, the New York (NYSE) Arca, Cboe, and Nasdaq exchanges are the direct subjects of the news.
The SEC, the entity responsible for giving the green light to this transition, has been discouraged in recent months by the potential damage to investors.
The non-profit organization Better Markets Inc had warned the U.S. Commission to “proceed particularly cautiously” in this regard.
For this reason, Gary Gensler and his team have refrained from giving a definitive answer to Bitcoin ETF options, but from now on things could change.
On August 8, the CBOE submitted an amendment to the application to the SEC, regarding the request for approval of such products. The document is three times longer than the first and addresses issues such as market manipulation and position limits in detail.
James Seyffart, ETF analyst at Bloomberg Intelligence, took the opportunity to give his opinion regarding the breaking news.
According to him, Bitcoin ETF options could land on the stock exchange before 2025, with the last deadline for the SEC expected by September 21.
We think the #Bitcoin ETF options happen in 4th quarter this year. Final deadline for SEC decision is ~Sept. 21 but there's more steps needed after that from OCC & CFTC.
Here are some BTC & ETH related ETFs including leveraged that already have options. cc @EricBalchunas https://t.co/xErD5oPiWb pic.twitter.com/USauv6QaFs
— James Seyffart (@JSeyff) August 8, 2024
How does ETF options trading work?
The news of the possible launch of Bitcoin ETF options by 2025 has created many optimistic expectations among investors, but how exactly do such products work?
The options are nothing more than contracts that give the right to the holders to buy or sell an asset at a predetermined price.
In particular, there are two types: call and put.
Call options offer the right to purchase an underlying asset, such as Bitcoin itself, at a fixed price, protecting against the potential increase in its value.
On the contrary, put options allow selling a security at a specific price, protecting oneself from potential pullbacks.
In both cases, those who subscribe to these contracts must pay a premium (just like an insurance) anchored to a strike price.
This latter establishes the strike level, above or below which the traders will benefit from exercising the contract. Each option also has a time expiration.
Below is the chart of BTC options (futures) on Deribit, with an expiration date of March 28, 2025.
Regarding the anticipated launch of ETF options on the US spot market, experts report a greater openness to institutional investments. The advantages that Bitcoin could assume are numerous but can be summarized in an increase in demand for cryptographic products.
In the meantime, while waiting for the SEC’s decision by early 2025, we can still rely on futures ETFs. These do not have a direct impact on the underlying asset, but they still allow exposure in that sense with more complex products.
In any case, they generally underperform their spot market equivalents because the cost of rolling over monthly futures contracts reduces overall returns.
Below is a graphic from Bloomberg Intelligence that shows the current Bitcoin futures ETFs equipped with a parallel options market.
Recap of the ETF situation on spot Bitcoin: all the milestones marked since January
The news of the introduction of ETF options before 2025 could have a positive effect, similar to what was done by the exchange-traded funds in January.
Since their approval, in fact, the spot Bitcoin ETFs have granted a “Net Inflow” of a whopping 17.34 billion dollars. In total, the Fund Managers tasked with handling client trades have accumulated assets worth 55.11 billion dollars.
All this has contributed to significantly pushing up the price of Bitcoin since the beginning of the year. In particular, since the launch of the ETFs the crypto has grown by about 40%, going from $40,000 to the current $60,000.
Grayscale, BlackRock, Fidelity and Ark Invest are among the providers that have managed the most institutional trades on BTC ETFs.
Among the major milestones marked by the Bitcoin spot ETF era, we cannot fail to mention the record in trading volumes on day 1 of trading.
At the opening, in fact, these instruments achieved total volumes of 4.6 billion dollars. The figure far exceeds what was recorded by the ETFs on gold in 2004, when they registered 1.63 billion dollars in trades.
BITCOIN SHATTERED ETF RECORDS
Over $4.6 BILLION in volume on opening day!
Gold ETF held the previous record at $1.63 billion on opening day back in 2004 pic.twitter.com/ybPVYKDf8E
— borovik (@3orovik) January 11, 2024
Larry Fink, CEO of BlackRock, stated in March that the exchange-traded funds Bitcoin represent the markets “fastest growing in the history of ETFs”
The hope for the next launch of ETF options is that they can match those numbers, even if they probably won’t have the same appeal in volumes.
Bitcoin Price Prediction for 2025
The latest news regarding Bitcoin ETF options could potentially push the crypto’s prices towards ambitious targets for 2025.
Recently, the analysis firm Bernstein revealed that it is strongly bullish on the crypto sector, highlighting a future price projection of $200,000 for BTC.
Their vision is based on the value of the inflows derived from Bitcoin spot ETF products, which have led institutional investors to hold digital coins.
In particular, analysts believe that spot ETFs will obtain up to 7% of the entire Bitcoin supply by 2025. Additionally, the issuing companies, according to Bernestein, will reach 190 billion dollars in assets under management by next year.
This obviously translates into a strong price rally of the asset, with dizzying targets. The same fund believes that at the end of the year the cryptocurrency will be traded at a valuation of 90,000 dollars per unit.
Similarly, the bank Chartered Standard is optimistic about the fate of Bitcoin and projects the coin to $100,000 by the end of the year.
The trend of the USA presidential elections will play a decisive role in this regard to push the prices of the crypto sector upwards.
Standard Chartered predicts Bitcoin could smash records in August, soaring to $100,000 by the U.S. presidential election in November.
Analyst Geoffrey Kendrick's forecast hinges on Joe Biden staying in the race; a Trump victory is seen as a boost for Bitcoin, thanks to… pic.twitter.com/F8i5mmGwfj
— Kyledoops (@kyledoops) July 2, 2024
