The launch of the options tied to BlackRock Inc.’s $44 billion iShares Bitcoin trust has set up potential record-breaking moments in Bitcoin.
Bloomberg data indicates that 80% of the contracts traded on Tuesday were bullish bets.
Bloomberg reported that nine out of ten most traded options were calls that predicted price increases.
The largest trading volumes were observed for the January $55 strike call and December $65 strikes calls, both of which were 25% more than the ETF closing price on Monday.
Options trading allows investors to leverage Bitcoin’s notorious volatility. They can buy or sell an asset for a fixed price, depending on if they expect it to increase or decrease in a certain timeframe.
Bitcoin’s record high and ETF influence
Bitcoin’s new all-time record high was $94,032, which coincided with the launch of these ETF options.
Investors are optimistic about the possibility of further inflows to the digital asset market.
This surge is a reaction to Donald Trump’s recent election victory.
Trump has committed to creating an environment that is favorable to digital assets, and to establishing a strategic Bitcoin Reserve for the US.
There are still questions about the timeline and the feasibility of these ambitious plans.
ETF inflows, strong demand
The iShares Bitcoin Trust, the largest US spot Bitcoin ETF, has seen significant demand.
Since its launch in early January, the ETF attracted a net inflow amounting to approximately $29 billion.
Notably, about $5 billion of this total was accumulated following the November 5 elections, signaling a heightened confidence in asset after political developments.
Caroline Mauron (co-founder of Orbit Markets) noted in a Bloomberg report that this trading volume is a “good start, demonstrating increasing links between the crypto native ecosystem and the traditional financial world.”
Although the current trading volume does not directly affect Bitcoin’s price a bullish outlook has been supported by positive news.
Interest from institutions and derivatives expansion
The global crypto derivatives markets have traditionally been dominated non-US platforms like Binance and Deribit.
The record-high interest in Bitcoin Futures hosted by Chicago’s CME Group Inc. shows that US institutions are increasingly interested in regulated crypto exposure.
Noelle Acheson is the author of the crypto Is Macro now newsletter. She emphasized that, while the US crypto derivatives markets remain smaller than other asset types, their expansion could attract new investor and broaden investment strategies.
Bitcoin was trading at $92,631 in London as of early Wednesday morning.
According to CoinGecko, the largest digital token more than doubled its value this year. This has pushed the total crypto market beyond its peak during the pandemic period.
This post Bitcoin ETF options fuel US cryptocurrency market surge may be updated as new information unfolds
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