Bitcoin Spot ETF Options Continue to Expand with Other Companies Following BlackRock

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Bitcoin Spot ETF Options Continue to Expand with Other Companies Following BlackRock

The launch of BlackRock's iShares Bitcoin Trust (IBIT) options has created a significant buzz in the crypto market. On its first day, IBIT reached a trading volume of $2 billion, making history. Bitwise is preparing to be the next asset management firm to step onto this stage by launching Bitcoin spot ETF options.

The excitement generated by IBIT is particularly noteworthy compared to the ProShares Bitcoin Strategy ETF (BITO), which reached only $363 million in trading volume on its launch day in 2021. However, IBIT options come with a limit of 25,000 contracts, which is relatively low compared to more traditional ETFs. Jeff Park from Bitwise notes that this limitation restricts IBIT's risk exposure, highlighting that only 0.5% of the trading is associated with this type of activity.

Regulations and Market Competition
Although IBIT's bitcoin spot ETF options are garnering attention, competition is quite fierce. During the same period, SPDR Gold Trust (GLD) options achieved a trading day of $5 billion, which is more than double IBIT's figure. Moreover, regulations are not working in IBIT's favor. The SEC and CFTC have imposed strict limits on Bitcoin-linked options while futures markets enjoy more freedom. Critics argue that this creates an unfair competitive environment.

On the other hand, hopes remain high. Eric Balchunas from Bloomberg described IBIT's launch as "unprecedented" and believes it could lead to significant changes once the restrictions ease. Meanwhile, as the positive outlook in the Bitcoin market continues, the largest cryptocurrency has surpassed $94,000, setting new records heading into the US session.

Next Up: Grayscale's Move
Grayscale Investments has announced plans to start options trading for spot Bitcoin exchange-traded funds. Inspired by BlackRock's recent success, Grayscale is set to begin options trading today. This initiative plans to utilize a "covered call" strategy for additional income. Grayscale will support this new trading venture with the Bitcoin Trust (GBTC) and Bitcoin Mini Trust (BTC).

Grayscale expressed satisfaction with the further development of the Bitcoin ETP ecosystem listed in the US. As Bitcoin finds support from these new trading initiatives, it is generating a strong wave of confidence in the markets.