Bitwise expects options trading for its Bitcoin ETF to start tomorrow

Bitwise CEO Hunter Horsley announced that options trading connected the firm’s Bitcoin ETF merchandise BITB volition commence connected Nov. 20.

In a Nov. 19 station connected X, Horsley stated:

“We expect options connected the Bitwise Bitcoin ETF (BITB) to statesman trading Wednesday.”

According to Bloomberg ETF expert James Seyffart, this could awesome the instauration of akin options features crossed different Bitcoin ETFs. The quality came soon aft the Office of the Comptroller of the Currency (OCC) confirmed that options trading for BlackRock’s iShares Bitcoin Trust (IBIT) would statesman today, Nov. 19.

Options trading allows investors to bargain oregon merchantability assets astatine a acceptable terms wrong a circumstantial timeframe, offering flexibility for speculation and hazard management. As such, the instauration of this diagnostic is expected to summation capitalist options for managing Bitcoin exposure.

Industry experts judge it volition heighten marketplace liquidity, pull caller participants, and integrate Bitcoin into the broader fiscal system.

Limitation inactive exists

However, not each aspects of the caller options trading situation are without concerns. Bitwise’s Jeff Park, Head of Alpha Strategies, expressed reservations regarding the presumption limits imposed connected Bitcoin ETFs.

For instance, BlackRock’s IBIT is capped astatine 25,000 contracts, which Park argues is excessively debased compared to the 400,000 options the ETF could support. He wrote:

“IBIT should person qualified for 400,000 options. To enactment this into context, CME Bitcoin futures contracts person a 2,000-contract limit, which is equivalent to astir 175,000 contracts for IBIT. Instead, we were fixed conscionable 280 Bitcoin futures contracts.”

Park explained that specified restrictions could disrupt marketplace conditions, forcing earthy buyers and sellers to navigate analyzable volatility patterns. Nevertheless, the Bitwise enforcement pointed retired that retail traders should not absorption solely connected larger ETFs similar IBIT but besides research different issuers, which could contiguous charismatic opportunities.

Meanwhile, Park acknowledged that the regulatory scenery has progressed importantly successful 2024, with the CFTC deferring authorization for ETF options to the SEC. He stated:

“If the CFTC had been arsenic politicized arsenic the SEC, we mightiness not person had a just motorboat astatine all. Their willingness to cede authorization for ETF options to the SEC, recognizing them arsenic securities wrong the scope of the law, is commendable.”

Strong ETF flows

The improvement surrounding the Bitcoin ETF options trading comes arsenic the fiscal instruments proceed to pull beardown capitalist involvement 11 months aft their launch.

Data from crypto investigation level SoSoValue shows nett inflows of $254 cardinal for spot Bitcoin ETFs connected Nov. 18, rebounding aft 2 days of $770 cardinal successful outflows.

BlackRock’s iShares Bitcoin Trust led the battalion with $89.3 cardinal regular inflows, followed by Fidelity’s FBTC with $60 million. Bitwise BITB, VanEck’s HODL, and ARK 21Shares ARKB recorded $44 cardinal successful inflows.

Additionally, GGrayscale’sGBTC and its mini money posted astir $60 cardinal combined inflows.

These developments underline the increasing request for Bitcoin-based concern vehicles arsenic the marketplace matures and connection caller opportunities for retail and organization investors.

The station Bitwise expects options trading for its Bitcoin ETF to commencement tomorrow appeared archetypal connected CryptoSlate.