BlackRock, the world’s largest asset manager, has launched options trading for its iShares Bitcoin Trust (IBIT), representing the first true institutional move to get into Bitcoin. Regulatory approval came in January, and the ETF has already already attracted massive inflows: $43 billion in assets.
Broadening the appeal for traditional investors and stabilizing the notorious price screams are two reasons Bloomberg analysts expect the new options market will smooth out Bitcoin’s wild volatility. Reduced volatility could also spur bigger investments and turn Bitcoin’s reputation from a speculative to an established asset class, said Galaxy Digital’s head of research, Alex Thorn, on Bloomberg TV.
Bitcoin-Settled ETF Options Enhance Investor Appeal
Some have suggested that Blankfein may have capitalized on the moment with the options market debuting with extraordinary interest, racking up notional exposure of $1.9 billion across 354,000 contracts on the first day, Bloomberg analysts Eric Balchunas and James Seyffart said.
Calls dominated the activity, with 289,000 contracts compared to 65,000 puts, yielding a bullish call-to-put ratio of 4.4:1. These sentiment cliches helped pump Bitcoin to a record high of $94,000 on Tuesday’s trading. The December 20 call option is a standout, says analysts, betting that BTC will surge to $180,000 or more within a month.
The ETF’s put-to-call volume ratio of 0.17, according to Balchunas, suggests strong bullish sentiment with a more than 57 percent difference from traditional ETFs like SPDR S&P 500 ETF (SPY) which has a ratio of 1.1.
Additionally, Marty Party, a market analyst, highlighted the unique settlement mechanism for IBIT options: Investors will get direct exposure to BTC price movements without using crypto exchanges, but contracts will settle in actual Bitcoin.
As of time of press, BTC trades at $91,580, up 4% for the week on a backdrop of bullish options strength for the ETF.
