Options for BlackRock’s iShares Bitcoin Trust ETF (IBIT) debuted with nearly $2 billion in trading volume, marking a milestone in cryptocurrency markets. This surge coincided with Bitcoin hitting a record high of over $94,000.
A Historic First Day for BlackRock Bitcoin ETF Options
On Nov. 20, Bloomberg ETF analyst James Seyffart reported that 354,000 contracts were traded on the inaugural day of IBIT options, generating $1.9 billion in notional exposure. Seyffart attributed this activity to Bitcoin’s sharp rise to $94,105 on Coinbase the day before.
Bloomberg’s senior ETF analyst Eric Balchunas described the trading volume as “unheard of,” noting that it dwarfed the $363 million seen on the first day of trading for the ProShares Bitcoin Strategy ETF (BITO), which previously held the record.
What Are IBIT Options?
IBIT options give investors the right to trade ETF shares at predetermined prices, allowing them to speculate on Bitcoin’s future price movements. The high trading volume indicates strong demand for these instruments.
- Notional Exposure: Measures market exposure, factoring in price movements and the underlying cryptocurrency value controlled by options.
- Put/Call Ratio: IBIT’s opening day ratio was 0.225, reflecting a significant majority betting on price increases (calls) versus price declines (puts).
Market Impacts and Insights
Balchunas pointed out the bullish nature of the contracts, particularly those expiring within a month. “This essentially bets on Bitcoin doubling in price soon,” he explained.
Ran Neuner, a former CNBC Africa host, highlighted how these trades drive demand. “Market makers buy the spot ETF to hedge options trades, causing a surge in Bitcoin purchases,” he said.
Joe Consorti, an industry executive, noted the significance of these contracts, calling them a gateway to massive liquidity pools. He also expressed optimism for Bitcoin reaching $100,000 by year-end.
As BlackRock’s ETF options set records, Grayscale is preparing to launch its own options on Nov. 22 in the U.S., adding to the growing momentum in Bitcoin investment products.
