By the end of Tuesday, November 19, Bitcoin (BTC) had surged past the $94,000 mark after Wall Street rolled out its latest product aimed at enhancing cryptocurrency accessibility within financial institutions.
Bitcoin exchange-traded funds (ETFs) have now opened for options trading, and this has driven BTC prices up to $94,000.
When this news broke, Bitcoin rose more than 4% in the past 24 hours and traded above $94,000, breaking the previous all-time high of $93,450 set last week on November 13.
At the same time, the index of the top 20 cryptocurrencies by market capitalization - CoinDesk 20 rose by 0.3% with Hedera (HBAR) being the largest gainer with a 9% increase in the past 24 hours. The largest loser in the index was Polygon (POL) with a decrease of 0.8%.
Trading options on Bitcoin ETFs will allow cryptocurrency investors to sell and buy digital assets at a predetermined time and specific price. While Bitcoin trading has been available on CME, BTC ETF options are significant for both financial institutions and retail investors.
Former market research director at Genesis, Noelle Acheson commented on this when he tweeted that "a deeper domestic derivatives market will enhance the growing sophistication of the market."
According to Acheson, this will reinforce investors' confidence in Bitcoin as it attracts a new audience while new trading strategies are developed, ensuring greater diversity in investments.
Acheson further explained how financial institutions would benefit from this due to high trading volumes and greater flexibility.
Acheson stated, "Options provide a deeper level of detail in expressing investment views and can increase exposure relative to the cost incurred, making them particularly attractive to large investors."
While the demand for Bitcoin ETF options trading is substantial, only 1 out of 11 spot Bitcoin ETFs in the United States - BlackRock's IBIT offers this service. IBIT has several hundred million available options, and most contracts are call options, meaning bets on the price increase of BTC.
As a result, the launch of spot Bitcoin ETFs triggered a price surge of BTC up to $94,000 but shortly thereafter, the price gradually declined to $92,000.
As of the press time on November 20, BTC was trading at $93,394, up 2.27% in the past 24 hours, including a 5.15% increase in trading volume reaching $76.68 billion and a market capitalization rising to $1.85 trillion.
