BlackRock Bitcoin ETF Options Rise: December 20 Call Sets $180,000 BTC Target
BlackRock, the world's biggest asset manager, started options trading for its iShares Bitcoin Trust. After regulatory clearance in January,
Bloomberg predicts that options trading on the $43 billion iShares Bitcoin Trust will minimize volatility and expand Bitcoin's investment base.
In a Bloomberg Television interview, Galaxy Digital head of firmwide research Alex Thorn said Bitcoin's volatility would reduce as it gains popularity. “Options will dampen volatility, and as volatility drops, people can take larger positions,” he said.
A drop in volatility might change investor opinion, making Bitcoin a viable asset for fundamental use cases rather than a speculative bet, Thorn said.
Options will let institutions hedge their holdings, boosting liquidity and perhaps affecting retail trading in positive markets.
Call options rule BlackRock's Bitcoin ETF. Bloomberg ETF analysts Eric Balchunas and James Seyffart reported roughly $1.9 billion in IBIT notional exposure across 354,000 contracts on Day 1 of options trading.
These futures included 289,000 calls and 65,000 puts, a bullish call-to-put ratio of 4.4:1. Seyffart said this huge demand in call options helped Bitcoin reach $94,000 on Tuesday, a new record high.
However, Balchunas said that most options contracts are positive, notably the December 20 call option, which wagers that Bitcoin will double in a month. Based on current pricing, speculators estimate BTC will reach a record high of $180,000 by that date.
Balchunas called BlackRock's Bitcoin ETF's put/call volume ratio "impressive," noting that the ratio of 0.17 signals significant positive sentiment compared to the SPDR S&P 500 ETF (SPY)'s 1.1.
Marty Party, a market specialist, said on social media that iShares Bitcoin Trust options will settle in Bitcoin. Investors may directly track BTC price fluctuations without using crypto exchanges when an option contract is executed.
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