After the approval of trading options on BlackRock’s Bitcoin ETF (exchange-traded fund) on Nasdaq, it was only a matter of time until the United States Securities and Exchange Commission (SEC) approved trading options for ETFs on other exchanges. On Friday, October 18, the commission allowed the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE) to offer options trading on several Bitcoin ETFs.
Specifically, the NYSE has received the green light to list and trade options for Grayscale Bitcoin Trust (GBTC), Grayscale Bitcoin Mini Trust BTC (BTC), and Bitwise Bitcoin ETF (BITB). The CBOE, meanwhile, is now allowed to offer trading options on the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB).
What Does This Mean for Bitcoin ETFs?
In a recent report, QCP Capital pointed out that this significant development could suppress the growth of US Bitcoin ETF market by improving liquidity. According to the trading company, the new ability to list exchanges and trading options will significantly increase the inflow of funds into Bitcoin exchange-traded funds.
QCP wrote:
With this morning’s approval by the SEC for the BTC options ETF to be listed on the NYSE, we believe this will give the ETF the necessary liquidity to attract stable inflows.
ETF options will give investors the right – but not the obligation – to buy or sell an ETF at a predetermined price and time. This investment selection allows investors to strengthen their exposure to the underlying asset while helping to hedge potential price fluctuations.
This latest round of approvals for Bitcoin ETF options trading comes at the right time for crypto products, which have been enjoying the attention of investors in recent weeks. According to data from SoSoValue, US Bitcoin ETFs recorded a total weekly inflow of more than $2.13 billion, the highest weekly performance since mid-March.
Since options trading will be live for all crypto products, US Bitcoin ETFs will definitely attract new investors, leading to high demand and strong inflows. With the entry of a sustainable ETF, investors could see the price of Bitcoin return to or exceed its March levels.
Bitcoin price action
As of now, the price of Bitcoin is around $68,180, showing a decrease of just 0.2% in the last 24 hours. On a weekly basis, however, the value of the leading cryptocurrency rose more than 8%.
According to QCP, the upcoming presidential election in the US may strengthen investors’ enthusiasm for risk assets such as Bitcoin. “This will increase asset risk and support our Uptober narrative,” the company said.
The price of Bitcoin on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from Shutterstock, chart from TradingView