Originally published on: November 20, 2024
According to Bloomberg’s ETF analyst James Seyffart, a total of 354,000 contracts were traded on IBIT’s first day, representing close to $1.9 billion in notional exposure. The unprecedented interest in these options played a role in driving Bitcoin to a record peak of $94,105 on Coinbase as reported by TradingView.
Eric Balchunas, senior ETF analyst at Bloomberg, described the massive $1.9 billion traded on IBIT’s first day as “unheard of,” especially when compared to the ProShares Bitcoin Strategy ETF (BITO) which recorded $363 million on its debut. The new options contracts allow investors to trade ETF shares at predetermined prices, enabling them to speculate on price movements of the ETF.
The put/call ratio for IBIT’s first day stood at 0.225, indicating a strong bullish sentiment among traders buying calls anticipating a rise in Bitcoin’s price. Balchunas highlighted the bullish outlook of some contracts set to expire in a month, suggesting a bet on Bitcoin potentially doubling in value within that period.
Former CNBC Africa host Ran Neuner attributed the market pump on that day to the launch of IBIT options. As traders purchased these options, market makers hedged their positions by buying the spot ETF, leading to significant net buying in both the ETF and spot Bitcoin.
Industry experts like Joe Consorti see the listing of options on spot BTC ETFs as a game-changer that opens access to vast liquidity pools. The optimism surrounding Bitcoin’s future performance is evident as the market anticipates a year-end target of well over $100,000.
In a similar move, Grayscale is gearing up to introduce options for its spot Bitcoin ETFs, further expanding the derivatives market for cryptocurrencies. With these developments, the crypto landscape is poised for continued growth and innovation in trading strategies.
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