Cboe Introduces Options Trading for Bitcoin ETF Based on Its ETF Index

Cboe Global Markets Inc. is set to launch the pioneering cash-settled index options that are pegged to the on-the-spot price of Bitcoin.

The upcoming Bitcoin ETF options by Cboe are scheduled for release on December 2, relying on its ETF Index that reflects a basket of Bitcoin exchange-traded funds traded in the U.S. market.

Institutional Investors Maintain Their Interest in Bitcoin ETFs Options

The introduction of such products comes in the wake of the Nasdaq offering Bitcoin ETF options, providing avenues for speculation on Bitcoin’s value fluctuations or risk management through derivative instruments.

More often than not, crypto options such as futures have been traded offshore due to stringent U.S. regulations.

Yet, the mounting appeal and increasingly positive outlook towards cryptocurrencies are prompting major American trading platforms to broaden their crypto offerings.

“Anticipating the benefits of cash settlement along with assorted index sizes and the availability of FLEX options, we envision these instruments affording traders heightened flexibility in their investment strategies,” Cboe noted in its release.

This week also saw Grayscale entering the fray by initiating options trading on its GBTC and BTC Mini ETFs. Moreover, BlackRock’s IBIT options trading made a splash, tallying trades worth over $425 million on its inaugural day.

As it stands, spot Bitcoin ETFs are carving out a notable market presence, now holding 5.33% of Bitcoin in circulation. Significant Bitcoin price surges in March and November were in line with a sharp $4 billion influx in ETF investments, indicating a marked correlation between ETF demand and consensus on price accumulations.

“Options are enriching the ecosystem by engaging more participants, which in turn enhances liquidity. And that liquidity is a major draw for big players. Therefore, we’re likely to witness greater institutional utilization not just of options but of the ETFs themselves, following the options’ availability,” remarked ETF analyst Eric Balchunas in a recent podcast.

Bitcoin ETF trading activity soared past $7.22 billion earlier in the month, a spike driven by a hopeful attitude towards regulatory frameworks. Ethereum ETFs equally experienced significant inflows amounting to $295 million, propelled by institutional players such as BlackRock and Fidelity.

Consequently, BlackRock’s Bitcoin ETF has advanced its market standing by amassing $40 billion in managed assets, putting the IBIT ETF amongst the global top 1% in its class. Furthermore, BlackRock’s acquisition of almost 9,000 Bitcoins in a single day has solidified its ETF’s stature.

These initiatives underscore an escalating endorsement of cryptocurrency vehicles within the mainstream financial milieu, propelled by institutional interests promoting remarkable growth in both Bitcoin and Ethereum ETF sectors.