BlackRock IBIT Options Will Bring Longterm Investors to Bitcoin: CryptoQuant
Tanzeel Akhtar has been covering the cryptocurrency and blockchain sector since 2015. She has written for the Wall Street Journal, Bloomberg, CoinDesk and Bitcoin Magazine.
BlackRock’s iShares Bitcoin Trust (IBIT) is set to make waves in the financial markets with the U.S. Securities and Exchange Commission (SEC) approving the listing and trading of options on its Bitcoin spot ETF.
This approval is expected to increase liquidity, attract long-term investors, and boost participation in the Bitcoin market, according to the research firm CryptoQuant.
The introduction of options for the IBIT Bitcoin spot ETF will provide investors with a tool to hedge or speculate on Bitcoin price moves. It’s another step toward broader institutional adoption of Bitcoin, a trend that has been gaining momentum in recent years.
The ability to trade options means BlackRock’s IBIT ETF will allow investors to manage their risk profiles more effectively, increasing their confidence in entering the cryptocurrency market, highlights CryptoQuant.
“Options could also mean that the ‘paper’ supply of Bitcoin will increase, as investors can get exposure to Bitcoin (buying or selling) without having to invest through the spot market being long without actually buying Bitcoin or being short/selling without having to buy Bitcoin in the first place,” according to CryptoQuant.
The chart below CryptoQuant highlights the Bitcoin supply in the perpetual futures market of crypto exchanges, as measured by the open interest in terms of Bitcoin. This increased during the bear market of 2022 from 279K to 549K Bitcoin as investors shorted Bitcoin.
Historically, Bitcoin has been seen as a high-volatility asset, but options offer a way to mitigate some of that risk by
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