Options contracts for BlackRock’s iShares Bitcoin Trust ETF (IBIT), a spot Bitcoin exchange-traded fund, experienced a groundbreaking debut with nearly $2 billion in trading volume. This impressive activity coincided with Bitcoin reaching a new all-time high of over $94,000.
James Seyffart, a Bloomberg ETF analyst, shared the figures on Nov. 20, highlighting that 354,000 contracts representing approximately $1.9 billion in notional exposure were traded on the first day.
“These options likely played a key role in pushing Bitcoin to its record high today,” Seyffart noted, referencing Bitcoin’s $94,105 peak on Coinbase on Nov. 19, as reported by TradingView.
Eric Balchunas, Bloomberg’s senior ETF analyst, emphasized the significance of this debut: “$1.9 billion on day one is unprecedented.” For context, he compared it to the ProShares Bitcoin Strategy ETF (BITO), the first Bitcoin-linked ETF in the U.S., which saw $363 million in options trading on its initial day.
A Powerful Tool for Market Moves
The new IBIT options allow investors to speculate on Bitcoin’s price by giving them the right to trade ETF shares at preset prices. The notional exposure metric reflects the overall market value impacted by these options, taking into account Bitcoin’s price shifts and the cumulative value controlled by the contracts.
A put/call ratio of 0.225 was observed during IBIT’s first day, indicating a strong preference for call options, which predict Bitcoin price increases, over put options, which bet on price declines.
“This is extremely bullish,” Balchunas commented, especially regarding short-term contracts expiring in a month, which he noted suggest expectations that Bitcoin’s price could double within that timeframe.
Market Impact and Broader Implications
Ran Neuner, a former CNBC Africa host, attributed Bitcoin’s price surge to the IBIT options launch. “When traders purchase these options, market makers buy the spot ETF to hedge, resulting in significant net buying pressure for both the ETF and Bitcoin,” he explained.
Joe Consorti, an industry executive, underscored the significance of this development. “Listing options for spot Bitcoin ETFs connects the market to the largest and most liquid financial pools globally,” he said on Nov. 19.
Consorti also expressed optimism for Bitcoin’s trajectory, predicting that market sentiment points toward the cryptocurrency exceeding $100,000 by year’s end.
Meanwhile, Grayscale is preparing to follow suit, with plans to launch options for its spot Bitcoin ETFs in the U.S. on Wednesday, Nov. 20.
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