A new hedging tool appears… Bitcoin ETF options trading exceeds 70,000 on the first day
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(Seoul = Yonhap Infomax) Reporter Suji Kang = A new hedging tool has appeared for Bitcoin investors. This is because options trading for iShares Bitcoin Trust (NAS:IBIT), Blackrock’s popular exchange traded fund (ETF), began for the first time on Nasdaq.
According to Nasdaq on the 19th (local time), about 73,000 option contracts were signed in IBIT in the first 60 minutes after trading began. This is an active trading volume that ranks in the top 20 among non-index options.
Investors and experts paid attention to how the newly launched options product would affect the Bitcoin market. This is expected to expand the scope of trading and speculation on Bitcoin price volatility and provide an opportunity for investors to use more sophisticated strategies for Bitcoin.
Options trading is a method that allows investors to predict whether the price of Bitcoin will rise or fall during a specific period and buy or sell assets at a predetermined price. In particular, it is useful for investors who want to take advantage of Bitcoin’s high volatility.
While the derivatives market has expanded into Bitcoin, economist and author of the ‘Crypto is Macro Now’ newsletter, Noel Acheson, said, “The Bitcoin derivatives market in the U.S. is still small compared to other asset classes. “It is mainly limited to institutional investors,” he said, adding, “The launch of this ETF option will increase market maturity and strengthen investor confidence, enabling more diverse investment strategies.”
He added, “Through this, we can also expect the effect of reducing volatility and decline.”
ETF options are mainly used by professional investors. This is clearly demonstrated by the fact that option trading volume for Invesco QQQ Trust (NAS:QQQ) and SDPR S&P 500 ETF Trust (AMS:SPY) exceeded actual fund trading volume over the past five business days.
Todd Son, ETF strategist at Strategas, predicted that the launch of this option will promote the emergence of more diverse fund products.
He said, “Grayscale has already completed reporting the covered call strategy fund, and Blackrock is also likely to launch a similar product.” He added, “Afterwards, various trend-following funds such as buffer strategies will appear one after another, expanding the Bitcoin ETF market ecosystem significantly.” “It will expand,” he said.
Meanwhile, option trading for other Bitcoin ETFs is scheduled to begin sometime this week. Last month, the U.S. Securities and Exchange Commission (SEC) approved rule changes submitted by the New York Stock Exchange and the Chicago Board of Options (Cboe) Global Markets, respectively. Accordingly, Grayscale Bitcoin Trust (GBTC), Grayscale Bitcoin Mini Trust (BTC), Bitwise Bitcoin ETF (BITB), Fidelity Wise Origin Bitcoin Fund (FBTC), ARK 21 Share Bitcoin ETF (ARKB), etc. A variety of ETFs will offer option products.
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1. Guest 1: Roberto Villarreal, a crypto analyst at Bitcoin Magazine
Q: Can you provide insights on the significance of the launch of IBIT options trading and how it will affect the Bitcoin market?
A: Of course, the launch of options trading for IBIT is a major step forward for Bitcoin investors, as it provides them with new hedging tools and the ability to implement more sophisticated strategies. This could potentially lead to increased institutional interest and adoption of Bitcoin as an asset class, as well as increased liquidity in the market. However, it’s important to note that options trading, like any other financial instrument, comes with inherent risks, and investors should educate themselves before venturing into this space.
Q: Some experts suggest that the U.S. Bitcoin derivatives market is still in its infancy compared to other asset classes. How do you see the future of Bitcoin derivatives trading evolving?
A: I believe we will see continued growth and maturation of the U.S. Bitcoin derivatives market over time. As more institutional investors become comfortable with the asset class, we’ll likely see a wider range of products and services tailored towards their needs. This could include more sophisticated derivatives such as futures, swaps, and options on options. Additionally, we may see greater regulatory clarity and standardization, which would further encourage participation from institutional investors.
Q: Do you think the launch of ETF options will have a positive impact on Bitcoin’s price stability and volatility?
A: It’s challenging to predict the exact impact on price stability and volatility, but options trading does provide ways for investors to hedge their positions and potentially reduce some of the downside risk associated with investing in Bitcoin. However, it’s also possible that increased trading activity in options could lead to greater price swings, depending on market sentiment and other factors. Ultimately, only time will tell how the market reacts to these new tools.
Q: Any final thoughts on the launch of IBIT options trading and its potential implications for the broader cryptocurrency ecosystem?
A: The launch of IBIT options trading is certainly a positive development for the crypt
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