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Bitcoin ETF Options Debut With Strong Trading Volumes on Nasdaq
Options based on BlackRock's iShares Bitcoin Trust ETF (IBIT) started trading today (Tuesday), opening a new phase in cryptocurrency investment. In just 60 minutes, the fund posted 73,000 contracts traded on the Nasdaq, ranking the top 20 most active nonindex options, CNBC reported.
Options offer investors an alternative way to hedge their Bitcoin exposure or speculate on its price. The IBIT options, launched on the Nasdaq, have quickly gained traction with their high trading volumes.
Bitcoin ETF Options
Options trading enables investors to leverage Bitcoin's volatility without directly owning the asset. By setting predetermined buy or sell prices, traders can design strategies to profit whether Bitcoin prices rise or fall. This mechanism encompasses risk management that is absent in spot Bitcoin trading.
Experts predict that the emergence of ETF options will spur the creation of new funds with diverse strategies. While bitcoin has long been associated with high volatility, derivatives have largely been the domain of institutional investors.
The launch of ETF options bridges this gap, offering a structured way for retail investors to manage risk and opportunities. Historically, options markets for popular ETFs like Invesco QQQ and SPDR S&P 500 have seen more activity than the ETFs themselves.
Bitcoin ETFs Gain Traction
The market is set to expand further as other Bitcoin ETFs follow suit with options trading. Funds like the Grayscale Bitcoin Trust (GBTC) and Bitwise Bitcoin ETF (BITB) are gearing up to join the fray following SEC approvals. As these offerings proliferate, they are likely to dampen Bitcoin's notorious price swings, encouraging broader adoption among cautious investors.
In October, The US Securities and Exchange Commission allowed 11 exchange-traded funds (ETFs) to list and trade options based on spot Bitcoin prices on the New York Stock Exchange. Early this year, the regulator approved spot Bitcoin ETFs to track the cryptocurrency’s value. The move marked a significant development for Bitcoin and the wider cryptocurrency community.
Some of the approved funds included Fidelity Wise Origin Bitcoin Fund, ARK21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, Grayscale Bitcoin Trust BTC, and iShares Bitcoin Trust ETF.
This article was written by Jared Kirui at www.financemagnates.com.* This article was originally published here
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