Key Points
- The U.S. SEC has approved more U.S. spot Bitcoin ETF options, causing mixed views on market impact.
- Analysts predict increased liquidity in BTC markets, but are divided on potential volatility and price effects.
The U.S. Securities and Exchange Commission (SEC) recently approved additional U.S. spot Bitcoin ETF options, leading to a range of market predictions.
Approval of Bitcoin ETF Options
On October 18th, the SEC gave the green light for these products to be traded on the New York Stock Exchanges (NYSE) and the Chicago Board Options Exchange (Cboe). NYSE American received approval to offer options for Fidelity’s BTC fund, FBTC, and ARK 21Shares’ ARKB. Cboe will trade Grayscale’s GBTC, mini BTC, and Bitwise’s BTIB. This follows the recent approval of BlackRock’s IBIT options.
The potential impact on the Bitcoin (BTC) market and price has sparked diverse opinions.
Mixed Opinions on Market Impact
Some analysts believe this could lead to increased volatility and liquidity in Bitcoin. Options allow professional traders to speculate and employ risk management strategies without owning the underlying BTC asset.
Last month, BTC investor Anthony Pompiliano suggested that the approval of IBIT options would lower BTC volatility and limit its upside potential.
However, Jeff Park from Bitwise saw the approval as a positive influence on BTC volatility, liquidity, and price, contradicting what he believed was a misguided view on the U.S. BTC ETF options.
Ed Tolson, CEO of Kbit, suggested that institutional market makers may need to buy as the price rises and sell as it falls, potentially amplifying volatility.
Michael Harvey, head of franchise trading at Galaxy Digital, projected a short-term spike in volatility, which could be reduced in the long run.
Despite the differing opinions on volatility and price impact, analysts generally agreed that the approval would inject more liquidity into BTC markets.
