Key Points
- Options trading for spot Bitcoin ETFs went live on November 19, pushing Bitcoin to a new all-time high of over $94,000.
- The first day of trading for BlackRock’s iShares Bitcoin Trust ETF [IBIT] options saw nearly $1.9 billion in notional exposure.
On November 19, the trading of options for spot Bitcoin (BTC) ETFs was launched. This led to Bitcoin reaching a new record, exceeding the $94,000 mark.
This significant event in the crypto finance world was led by BlackRock’s iShares Bitcoin Trust ETF [IBIT]. This was the first spot Bitcoin ETF that was approved for options trading on Nasdaq.
IBIT Options’ Impressive Debut
The first day of trading for IBIT options saw immense activity. According to Bloomberg ETF analyst James Seyffart, trading hit nearly $1.9 billion in notional exposure.
There were 354,000 contracts, 289,000 calls, and 65,000 puts, resulting in a call-to-put ratio of 4.4:1. Seyffart attributed these trades as the main driver behind BTC’s all-time high.
Jeff Park, Head of Alpha Strategies at Bitwise, described the day as historic for Bitcoin ETF options trading. Several key observations were made, including the creation of a “volatility smile” early in the day, which expanded further by the close.
Interestingly, while the BVIV Index showed fluctuating IV moves, it didn’t correlate predictably with BTC price trends. Park noted that the 01/17/24 C55 contract traded over 40K, showing deep liquidity.
The 12/20/24 C100 contract garnered significant early interest, indicating a high-risk vega opportunity. The put/call ratio, sitting at approximately 0.23, showed a strong preference for upside calls over downside puts.
Contrary to expectations, Park observed that IBIT’s options trading did not lessen interest in MicroStrategy [MSTR] options, which kept its independent momentum and closed higher.
Industry Reactions
The crypto industry broadly recognized the significance of IBIT’s first day. Bloomberg’s Senior ETF analyst Eric Balchunas commented that $1.9 billion in notional exposure was “unheard of” for a debut.
However, Balchunas added that $1.9 billion isn’t quite big dog level yet, eg $GLD did $5b today, but give it a few more days/weeks.
Nate Geraci, President of the ETF store, emphasized that the availability of options fundamentally changes the market dynamic. He stated that options make it much easier & more enticing for institutional investors to enter the arena.
Bitcoin’s Future
While IBIT had a remarkable start, the excitement doesn’t stop here. Options on Bitcoin ETFs from Bitwise and Grayscale are set to launch on Wednesday, with additional offerings expected soon.
With Bitcoin hitting $94,000 with the first options trading launch, speculation now turns to whether $100,000 can be next as more products go live.
Recent trends suggest this may be plausible. According to AMBCrypto, BTC’s current trajectory mirrors previous patterns that preceded significant rallies.
Furthermore, Fundstrat Capital’s CIO Tom Lee agreed, predicting the $100K milestone could be crossed sooner than expected.
As the first day of IBIT options trading demonstrated, the evolving Bitcoin market is entering a phase of dynamic growth, with record-breaking milestones seemingly within reach.
