With options trading approved for BlackRock’s Bitcoin ETF (exchange-traded fund) on the Nasdaq, it was only a matter of time before the U.S. Securities and Exchange Commission (SEC) approved ETF options trading on other exchanges. On Friday, October 18, the commission allowed the Fresh York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE) to offer options trading for several cash Bitcoin ETFs.
Specifically, the NYSE has been given the green featherlight to list and trade options for Grayscale Bitcoin Trust (GBTC), Grayscale Bitcoin Mini Trust BTC (BTC), and Bitwise Bitcoin ETF (BITB). On the other hand, CBOE can now offer options trading on the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB).
What does this mean for Bitcoin ETFs?
In a recent report, QCP Capital revealed that this significant development could accelerate the growth of US Bitcoin ETF market by increasing liquidity. According to the trading firm, the up-to-date ability of exchanges to list and trade options will significantly escalate capital flows into Bitcoin exchange-traded funds.
QCP wrote:
With this morning’s SEC approval to list BTC Options ETFs on the Fresh York Stock Exchange, we believe this will provide the ETF with the liquidity necessary to attract sustained inflows.
ETF options give investors the right – but not the obligation – to buy or sell an ETF at a predetermined price and time. This investment choice allows investors to escalate their exposure to the underlying asset while helping to hedge against potential price fluctuations.
This latest round of Bitcoin ETF options trading approval comes at an ideal time for crypto products that have been seeing a lot of investor interest in recent weeks. According to SoSoValue data, U.S. Bitcoin ETFs recorded total weekly inflows of over $2.13 billion, the highest weekly performance since mid-March.
With the introduction of options trading on all crypto products, US Bitcoin ETFs are sure to attract up-to-date investors, leading to greater demand and stronger inflows. With sustained ETF inflows, investors could see Bitcoin’s price return to or above March levels.
Bitcoin price action
Currently, Bitcoin is trading at around $68,180, reflecting just a 0.2% decline in the last 24 hours. However, on a weekly basis, the value of the flagship cryptocurrency increased by over 8%.
According to QCP, the upcoming US presidential elections may escalate investor appetite for risky assets such as Bitcoin. “This will drive growth in risk assets and support our Uptober narrative,” the company added.
The price of Bitcoin on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from Shutterstock, chart from TradingView
