BlackRock's Bitcoin spot ETF (IBIT) options began trading on Nasdaq last night, creating a new way for Wall Street investors to trade and bet on Bitcoin prices. Nasdaq stated that IBIT traded 73,000 options contracts in the first 60 minutes of trading on Tuesday, making it one of the top 20 most active 'non-index options' yesterday.
Meanwhile, Bitcoin also broke its previous high last night, with OKX trading data showing that Bitcoin reached a high of $93,888 last night, setting a new historical record.
Bloomberg ETF analyst James Seyffart stated on social media:
According to statistics, the total notional exposure of $IBIT (iShares Bitcoin Trust ETF) options trading on its first day is close to $1.9 billion, with a total of 354,000 contracts traded. Of these, call contracts amounted to 289,000, while put contracts were 65,000, resulting in a call-to-put ratio of 4.4:1. These options trades were almost certainly one of the key factors contributing to Bitcoin's new historical highs today.
UPDATE: Final tally of $IBIT's 1st day of options is just shy of $1.9 billion in notional exposure traded via 354k contracts. 289k were Calls & 65k were Puts. That's a ratio of 4.4:1. These options were almost certainly part of the move to the new #Bitcoin all-time highs today pic.twitter.com/IN3s9hajJ2
— James Seyffart (@JSeyff) November 19, 2024
How will open options products affect Bitcoin?
Economist and columnist for (Crypto is Macro Now) Noelle Acheson stated that Bitcoin has an active derivatives market, but in the United States, its scale is still small compared to other asset classes and is largely limited to institutional participants. However, with the launch of new products, investors will have more diversified investment and trading strategies, while Bitcoin can also benefit from it.
The deeper onshore derivatives market will increase the growing complexity of the market. This will enhance investor confidence in the asset, introduce new groups, and allow for more diversified investment and trading strategies... Under other constant conditions, this should suppress volatility and downside risk.
On the other hand, Strategas ETF strategist Todd Sohn also stated that the launch of Bitcoin ETF options may lead to the creation of new funds that include these options.
Grayscale has submitted an application for a 'Covered Call Fund', and I believe BlackRock will also submit an application. Then we will get a buffer against market volatility, and we will see any other trend-following strategies that people think of. I believe the ecosystem will really take off from here.
(This article is reprinted with permission from GT Radar)
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