SEC Approves BlackRock's Bitcoin ETF Options on Nasdaq Options allow leverage, potentially increasing volatility. Bitcoin volatility reached 3.2% in August.
US Securities and Exchange Commission (SEC) Greenlit Options Trading for BlackRock's iShares Bitcoin Trust (IBIT) on the Nasdaq on Friday.
Unlike owning shares of an ETF, options provide leverage. This allows traders to control large positions with less capital.
This builds on the foundation of mainstream bitcoin acceptance following the SEC's approval of 11 spot ETFs in January.
BlackRock, the world's largest asset manager, led the push, opening new doors for institutional investors to gain some bitcoin exposure, albeit indirectly.
According to Bloomberg ETF analyst Eric Balchunas, other major institutions are also likely to move forward with their own Bitcoin ETF options.
Balchunas tweeted: “Huge win for bitcoin ETFs (which attracts more liquidity, which attracts even bigger fish).”
He and fellow analyst James Seyfart accepted the odds at 70% by the end of May.
Effect on Volatility
With options now on the horizon, traders are likely to make more speculative bets. Data suggests this could amplify price swings and create more market volatility.
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recent Keiko Research Report This highlights that liquidity fragmentation and price divergence have worsened since the launch of spot bitcoin ETFs, especially on weekends when market depth thins.
This trend suggests that the introduction of Bitcoin ETF options will increase volatility especially during times of market stress.
Despite this, Bitcoin Volatility in 2024 relatively subdued, peaking at just 3.2% in August—well below the 4-5% levels seen in previous years.
Crypto market movers
Bitcoin is trading at $63,072, down 0.6% in the past 24 hours.Ethereum is down 0.1% at $2,552.
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