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US spot Bitcoin options launch seen as market game changer

US spot Bitcoin options launch seen as market game changer

GrafaGrafa2024/11/19 17:00
By:Mahathir Bayena

The upcoming introduction of spot Bitcoin (CRYPTO:BTC) ETF options in the U.S. is poised to make a significant impact on financial markets, attracting attention from both institutional and retail investors.

"The floodgates for Bitcoin’s next evolution in financial markets are about to open," remarked Joe Consorti, head of growth at Bitcoin custody firm Theya, highlighting the significance of the imminent launch of spot Bitcoin ETF options in the United States.

This development will start with the trading of spot Bitcoin ETF options, beginning with BlackRock’s iShares Bitcoin Trust (IBIT), set for November 19.

On November 18, the Options Clearing Corporation (OCC) confirmed its readiness for the launch, and Alison Hennessy, Nasdaq’s head of ETP listings, announced that Nasdaq plans to list and trade these spot BTC ETF options.

These options will provide investors the right to buy or sell ETF shares at specific prices, enhancing market liquidity, risk management, and price discovery mechanisms.

“In traditional markets, derivatives are ten to twenty times the size of the underlying market cap,” explained Consorti, pointing out the significance of options in financial markets.

Currently, Bitcoin’s derivatives market is relatively undeveloped, making up less than 1% of the $1.8 trillion spot market cap, with most trading taking place offshore or over-the-counter.

He also emphasised that the U.S. equity markets, which account for 44% of the $109 trillion global equity market, are the largest and most liquid in the world.

The launch of Bitcoin ETF options could tap into these liquidity pools and open broader participation opportunities for major market players.

As derivatives markets develop, Bitcoin’s trading ecosystem may begin to resemble that of equities and commodities, leading to substantial increases in trading volume.

“Listing options on ETFs opens the doors to the largest and deepest liquidity pools on the planet,” Consorti added, indicating that this shift could unlock substantial new trading activity, potentially reaching trillions of dollars.

At the time of reporting, the Bitcoin (BTC) price was $91,911.52.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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