After options trading on BlackRock’s Bitcoin ETF (exchange-traded fund) was approved on Nasdaq, it was only a matter of time until the US Securities and Exchange Commission (SEC) allowed ETF options trading 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 for several Bitcoin exchange-traded funds.
Specifically, the NYSE has received the green light to list and trade options for the Grayscale Bitcoin Trust (GBTC), the Grayscale Bitcoin Mini Trust BTC (BTC), and the Bitwise Bitcoin ETF (BITB). On the other hand, CBOE is now allowed to offer options trading 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 revealed that this notable development could drive US Bitcoin growth ETF market by enhancing liquidity. According to the trading company, the new ability for exchanges to list and trade options will significantly boost capital flow into Bitcoin exchange-traded funds.
QCP wrote:
With this morning’s approval by the SEC to list BTC ETF options on the NYSE, we believe this will provide the ETF with the liquidity needed to attract sustainable inflows.
ETF options will give investors the right—but not the obligation—to buy or sell ETFs at a predetermined price and time. This investment option allows investors to enhance their exposure to the underlying assets while helping to hedge against potential price fluctuations.
This latest round of approval for Bitcoin ETF options trading comes at an ideal time for cryptocurrency products, which have received significant attention from 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.
As options trading begins on all cryptocurrency products, US Bitcoin ETFs are bound to attract new investors, leading to increased demand and stronger inflows. With sustained ETF inflows, investors could see Bitcoin price return to or exceed March levels.
Bitcoin price movement
As of now, Bitcoin’s price is around $68,180, reflecting a decline of just 0.2% over the past 24 hours. However, on the weekly time frame, the value of the major cryptocurrency increased by more than 8%.
According to QCP, the upcoming US presidential election could boost investors’ appetite for high-risk assets like Bitcoin. “This will push risk assets higher and support our Uptober narrative,” the company added.
The price of Bitcoin on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from Shutterstock, chart from TradingView