The US Securities and Exchange Commission (SEC) greenlit options trading for BlackRock’s iShares Bitcoin Trust (IBIT) on the Nasdaq on Friday.

Unlike holding shares of the ETF, options offer leverage. This allows traders to control larger positions with less capital.

This builds on the foundation of mainstream Bitcoin acceptance following the SEC’s approval of 11 spot ETFs in January.

BlackRock, the world’s largest asset manager, has led this push, opening new doors for institutional investors to get some Bitcoin exposure, even if indirect.

According to Bloomberg ETF analyst Eric Balchunas, there’s also the possibility of other major firms getting the go-ahead on their own Bitcoin ETF options.

Balchunas tweeted: “Huge win for the Bitcoin ETFs (as it will attract more liquidity which will in turn attract more big fish).”

He and fellow analyst James Seyfartt had previously given 70% odds of approval by the end of May.

Effect on volatility

With options now on the horizon, traders are likely to make more speculative bets. Data suggests this could amplify price swings and create more market turbulence.

A recent Kaiko Research report highlights that liquidity fragmentation and price discrepancies have intensified since the launch of spot Bitcoin ETFs, especially during weekends when market depth thins.

This trend suggests that the introduction of Bitcoin ETF options could heighten volatility, especially during market stress.

Despite this, Bitcoin volatility in 2024 has remained relatively subdued, peaking at just 3.2% in August—well below the 4-5% levels seen in previous years.

Crypto market movers

  • Bitcoin is down 0.6% over the past 24 hours to trade at $63,072.

  • Ethereum is down 0.1% to $2,552.

What we’re reading

  • Inside efforts to get FTX exec Caroline Ellison a short prison stint: ‘She’ll be out inside of a year’ — DL News

  • Ethereum’s Pectra Upgrade Set to Roll Out in Two Phases — Milk Road

  • BNY Identified as First Bank to Receive SEC Exemption From SAB 121 — Unchained

  • BingX Crypto Exchange Suffers $43M Loss in Hack — Milk Road

  • Prediction Markets Go to Washington(’s Appeals Court) — CoinDesk

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