Bitcoin ETF Linked Options Launches in December
November 22, 2024
Cboe Global Markets Inc. has announced plans to offer the first cash-settled index options tied to the spot price of Bitcoin.
Cboe’s Bitcoin ETF options will launch on December 2 and will be based on its own ETF index, which tracks a group of U.S.-listed Bitcoin ETFs.
Bitcoin ETF Options Continue to Attract Interest from Institutional Investors
This development comes shortly after Nasdaq listed a Bitcoin Options ETF, allowing investors to speculate on Bitcoin price movement or manage risk through derivatives.
Crypto derivatives, including options and futures, have traditionally been traded outside the United States due to regulatory hurdles.
However, the growing demand and positive attitude towards crypto adoption has encouraged major US exchanges to expand their offerings in this sector.
“We expect that the unique benefits of cash settlement, combined with the availability of different index sizes and FLEX options, will give clients more flexibility in their trading strategies,” Cboe said in its press release.
Earlier this week, Grayscale joined the trend by launching options trading for its GBTC and BTC Mini ETFs. Meanwhile, BlackRock’s IBIT options trading set a record on its first day, with more than $425 million in trades.
Overall, spot Bitcoin ETFs continue to gain significant momentum, now accounting for 5.33% of all Bitcoin mined. Bitcoin peaked in March and November with $4 billion inflows into ETFs, highlighting a strong correlation between ETF demand and price accumulation.
“Options expand the ecosystem, bring more traders in, bring more liquidity. And liquidity is the bait for the big fish. So you should see more institutions using not just options but the ETF itself because of the availability of options,” ETF analyst Eric Balkunas said in a recent podcast.
Bitcoin ETF trading volumes topped $7.22 billion earlier this month, driven by optimism over regulatory clarity. Ethereum ETFs also saw inflows of $295 million, driven by institutional interest led by firms like BlackRock and Fidelity.
BlackRock’s Bitcoin ETF has further cemented its dominance by reaching $40 billion in assets under management (AUM). This rapid growth places IBIT in the top 1% of global ETFs by AUM.
BlackRock’s aggressive acquisition of nearly 9,000 Bitcoin in a single day has further strengthened its ETF’s position in the market.
This series of developments points to a growing acceptance of cryptocurrency products within traditional financial markets, with institutional interest driving unprecedented growth in Bitcoin and Ethereum ETFs.
