BlackRock’s Bitcoin ETF options made a historic debut, recording nearly $1.9 billion in notional value in circulation on the first day. Jeff Park, Head of Alpha Strategies at Bitwise Invest, shared his detailed observations on X, highlighting key takeaways from the opening trading day.
“Today marks the historic first day of the launch of BTC ETF options. It did not disappoint, with over $1.86 billion in virtual value changing hands!” Garden He shouted. He provided a thread outlining the top 10 interesting observations he made during the day.
BlackRock Historical Bitcoin ETF Options, Day 1
Park noted that the market quickly established a “volatility smile” by 9:45 a.m., which continued and widened as the day progressed. “In fact, the smile became wider throughout the day, ending with higher wings by EoD,” he noted.
Analyzing the BVIV indicator from Volmex Finance, Park highlighted that implied volatility (IV) movements are not predictably in line with Bitcoin’s price path. “What’s most interesting is that it didn’t match BTC’s upward (and then downward) sloping price movement in a predictable way,” he commented.
The most actively traded contract was the C55 call option on 01/17/24, which exceeded 40,000 contracts. Park noted that this contract has already exceeded the maximum position limit of 25,000. “As I shared yesterday, the 25,000 limit is very small compared to the deep liquidity that IBIT has demonstrated over the months,” he said.
Park was particularly intrigued by the C100 call option on 12/20/24, which he described as “a real lottery ticket.” Trading at an implied volatility of 105% and with a delta of just 3%, this option saw significant volume early in the trading day. “The implied volume was wiped out by 105%. What’s even more interesting is how heavy the trading volume was in the first hour of the market open. This means that a serious investor was loading at 10 a.m., and the price steadily increased as the supply volume rose. He explained that these were Probably the biggest opportunity of the day.
The overall put/call ratio was around 0.23, indicating a strong preference for call options over put options. “However, what is more interesting is if you break it down by expiration date,” Park noted. Longer expiry periods, such as the January 2026/2027 contracts, showed a lower put/call ratio of 0.08. “This means there is almost a 10x imbalance to the upside,” he stressed, highlighting the very bullish sentiment.
Contrary to some expectations, MicroStrategy (MRS) options trading has remained strong despite the launch of EBIT options. “MSTR trading volume decoupled from Bitcoin meaningfully in the past hour, closing higher than where we started the day,” Park noted. “MSTR has its own role,” he concluded, noting that the company’s stock continues to attract its own discerning investor base.
Looking to the future, Park mentioned the upcoming launch of BITB options. “It will be a series of other options along with IBIT and others for investors to consider before buying/selling and determining where the best value may lie,” he said. Park expressed his belief that non-institutional trading will gravitate towards non-IBIT ETFs, which may provide more opportunities for professional retail investors.
Bloomberg ETF expert James Seyphart available Additional insights confirm huge trading volumes. “The final tally for the first day of IBIT options is at least $1.9 billion of notional exposure traded across 354,000 contracts. 289,000 were calls and 65,000 were puts. That’s a 4.4:1 ratio,” Seyfart shared on X. These options likely contributed to Bitcoin reaching its all-time highs during the day.
When cryptocurrency analyst James van Straaten inquired about the theoretical target and position limits, Seyfart acknowledged the limitations. “A 25k position limit will likely be weighted on volume and open interest for the foreseeable future,” he replied. Regarding the rationale behind the limits, Seyfart explained, “It’s not a standard – no. But the SEC and the CFTC were certainly concerned about market manipulation and so on. That was part of the requirements to get approval!”
At press time, Bitcoin was trading at $93,404.
Featured image created with DALL.E, a chart from TradingView.com