The IBIT Bitcoin ETF options markets opened on Tuesday at the NASDAQ, pushing BTC to a new all-time high and ushering in a new way for investors to trade and speculate on Bitcoin’s price.
According to Bloomberg Intelligence ETF analyst James Seyffart in an X post, BlackRock’s iShares Bitcoin Trust (IBIT), which became the first Bitcoin ETF to receive approval, traded close to $2 billion on day one. NASDAQ told CNBC that Blackrock Bitcoin ETFs traded over 73,000 options contracts within the first hour of trading, placing the fund among the top 20 most active non-index options.
Blackrock Bitcoin ETFs Could Attract New Buyers and Sellers
The CNBC report states that by midday Tuesday, over 100,000 IBIT Bitcoin ETF options had changed hands, which accounted for at least 85% of the trading volume. With the ETF, which holds at least $40 billion in market value, going up 1.6% to trade at a new all-time high of $53 in an early morning session, Bitcoin borrowed a leaf and also rose 1.6% to trade at $92,800 before shooting briefly to $93,900.
Bitcoin touched the new all-time high of $93,900 for the first time during Tuesday’s trading, a move that crypto market structure pundit Dennis Dick associated with growing interest in the Blackrock Bitcoin ETFs trading. Experts expect the market volatility of BTC to reduce further should there be more interest in the spot Bitcoin ETF market. Dick has previously opined that any rising open interest would “create natural buyers and sellers on both sides of the market… This thickens the market and increases liquidity, reducing volatility.”
IBIT ETF Trading Currently Holds the 15th Position
The first-ever Blackrock Bitcoin ETFs, slated for maturity between mid-December and mid-January, have recorded notable trades of up to $10,000 contracts for the January $53 calls, 15,000 contracts for January $55 calls and 10,000 contracts for December $53 calls. According to analyst Chris Murphy, the deputy head of derivatives strategy at the Susquehanna International Group, IBIT ETFs trading currently holds the 15th position among the listed equity options.
When traders place call options in the ETF market, they get the right to buy but are not obliged to do so at a predetermined price within the agreed period. Should the buyer exercise their right to that call, the seller must sell the digital asset. On the other hand, a put option gives the holder of an asset the right to sell it at a pre-determined price on a particular date or before the period expires. For context, Bloomberg senior ETF analyst Eric Balchunas avers that “$1.9b is unheard of for Day one […] BITO did $363 million and that’s been around for four years.”
Crypto is Macro Now
Like all other exchange-traded funds, IBIT Bitcoin ETF options are designed to enable investors to bet on Bitcoin’s infamous volatility by allowing them to sell or buy the asset at a predetermined price. Investors will usually bet on a price based on whether they believe it will be higher or lower during a given period.
According to Noelle Acheson, economist and author of the “Crypto is Macro Now” newsletter, “Bitcoin has a lively derivatives market, but in the U.S., it is still tiny compared to other asset classes and is largely limited to institutional players.”
Conclusion
The successes associated with Blackrock’s IBIT ETFs have become a significant part of a growing institutional involvement within the crypto space. The paradigm shift clearly reflects changing market dynamics where traditional financial players are active in what most people previously called a niche market.
The successful launch of the IBIT Bitcoin ETF options creates a broader market where investors have many more options to get exposed to cryptocurrencies. Such moves will likely attract more investors, introduce more excellent market stability, and reduce volatility within the crypto space.
