In September, the SEC approved options for several of the spot bitcoin ETFs on different exchanges, and more options products are expected to become available in the coming days.
Bitcoin is unstoppable and, Although it exceeded US$94,000, it later moderated the rise and is located below that key value. And it is that the leading cryptocurrency touched all-time highs after breaking $94,000, with an increase of more than 1.9% in the last 24 hours.
In the rest of the market, “altcoins” with disparity. The greatest advance was 13% by Cardanobut in the opposite direction they go down: Doge Coin (-4.4%), and Solarium (-2.7%).
For its part, the negotiation of options on the ETF of BTC spot continues to advance. In September, the US Securities and Exchange Commission (SEC) approved options for several spot Bitcoin ETFs on different exchanges, and more options products are expected to be available in the coming days.
What role did ETFs have in the rise of Bitcoin?
The great debut was starred by, As it could not be otherwise, BlackRock’s IBIT fund, whose options reached almost US$2 billion in national exposurean “unprecedented” figure for some analysts. “The first day of options was just under $1.9 billion in notional exposure, traded across 354,000 contracts. 289,000 were calls and 65,000 were puts. That’s a proportion 4.4:1,” notes James Seyffart, Bloomberg ETF analyst, in a post on the social network X (formerly Twitter).
Options contracts allow investors to buy or sell an asset at a specific price at a predetermined time. For example: you buy a call option on BTC with a strike price of $95,000 and an expiration date of 30 days. If the price of Bitcoin rises to $100,000, You can exercise the option and buy BTC for $95,000, obtaining a profit of US$5,000 (less the cost of the option premium) in the process.
These tools are essential in financial markets and are used for both speculation and risk hedging. Although the CME already offered bitcoin options, spot bitcoin ETF options are a big development for both retail participants as for financial institutions, said Noelle Acheson, former director of market analysis at Genesis.
“The BTC derivatives market is dynamic, but in the US it remains small compared to other asset classes and is largely limited to institutional players. A deeper derivatives market at the local level will enhance the growing sophistication of the market. This will reinforce investor confidence in the asset, attracting new groups of participants and allowing a greater variety of investment and negotiation strategies,” said this expert.
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“Options offer a cheaper and more flexible hedging tool than futures, strengthening the case for greater participation by traditional market makers. This would be positive for overall market liquidity, which in turn will likely attract more institutional investment , more participation of market makers, and so on in a virtuous circle. Greater sophistication should, all things being equal, reduce both volatility and drawdowns, further improving the attractiveness of BTC for traditional investors,” he adds.
Source: Ambito
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