Following the authorization for options trading on BlackRock’s Bitcoin ETF (exchange-traded fund) on Nasdaq, it was only a matter of time before the United States Securities and Exchange Commission (SEC) allowed ETF options trading on additional exchanges. On Friday, October 18, the commission granted approval for the New York Stock Exchange (NYSE) and Chicago Board Options Exchange (CBOE) to provide options trading for various spot Bitcoin ETFs.
In particular, the NYSE has been authorized to list and trade options for Grayscale Bitcoin Trust (GBTC), Grayscale Bitcoin Mini Trust BTC (BTC), and Bitwise Bitcoin ETF (BITB). Meanwhile, the CBOE is now allowed to offer options trading for the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB).
What Does This Indicate for Bitcoin ETFs?
A recent report from QCP Capital stated that this significant development could accelerate the growth of the US Bitcoin ETF market by improving liquidity. The trading firm noted that the new capability of exchanges to list and trade options is likely to considerably enhance capital flow into these Bitcoin exchange-traded funds.
QCP remarked:
With this morning’s SEC approval for BTC ETF options to be listed on the NYSE, we believe this will provide the ETF with the necessary liquidity to attract sustainable inflows.
ETF options will offer investors the right — but not the obligation — to buy or sell an ETF at a set price and time. This investment option allows investors to increase their exposure to an underlying asset while providing a hedge against potential price variations.
This latest wave of approval for Bitcoin ETF options trading comes at an ideal moment for crypto products, which have been seeing considerable interest from investors in recent weeks. Data from SoSoValue indicates that US Bitcoin ETFs had a total weekly inflow exceeding $2.13 billion, marking the highest weekly performance since mid-March.
With options trading set to launch across all crypto products, US Bitcoin ETFs are expected to draw new investors, resulting in increased demand and stronger inflows. With these sustained ETF inflows, investors may witness Bitcoin prices returning to or exceeding its March levels.
Bitcoin Price Trends
Currently, the price of Bitcoin hovers around $68,180, which reflects a slight 0.2% decrease in the past 24 hours. However, on a weekly basis, the flagship cryptocurrency has increased by more than 8%.
According to QCP, looming presidential elections in the US could heighten investor interest in risk-on assets such as Bitcoin. “This will drive risk assets upwards and support our Uptober narrative,” the firm concluded.
The price of Bitcoin on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from Shutterstock, chart from TradingView
