Bitcoin ETF Liquidity To Increase Following SEC’s Options Approval, QCP Reveals

Following the approval of options trading on BlackRock’s Bitcoin ETF (exchange-traded fund) on Nasdaq, it was only a matter of time until the United States Securities and Exchange Commission (SEC) authorized ETF options trading on other exchanges. On Friday, October 18, the commission permitted the New York Stock Exchange (NYSE) and Chicago Board Options Exchange (CBOE) to offer options trading for several spot Bitcoin ETFs.

Specifically, the NYSE received the green light to list and trade options for Grayscale Bitcoin Trust (GBTC), Grayscale Bitcoin Mini Trust BTC (BTC), and Bitwise Bitcoin ETF (BITB). CBOE, on the other hand, is now permitted to offer options trading on the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB).

In a recent report, QCP Capital revealed this notable development could push the growth of the US Bitcoin ETF market by enhancing liquidity. According to the trading firm, the new capacity of exchanges to list and trade options will significantly boost capital influx into the Bitcoin exchange-traded funds.

QCP wrote:

With this morning’s approval by the SEC’s approval for BTC ETF options to be listed on the NYSE, we believe this will provide the ETF with the needed liquidity to attract sustainable inflows.

ETF options will give investors the right — but not the obligation — to purchase or sell an ETF at a predetermined price and time. This investment choice allows investors to bolster their exposure to an underlying asset while helping to hedge against potential price fluctuations. 

This latest round of approval for the Bitcoin ETF options trading comes at the perfect time for the crypto products, which have been enjoying substantial attention from investors in recent weeks. According to data from SoSoValue, the US Bitcoin ETFs recorded a total weekly inflow of over $2.13 billion, the highest weekly performance since mid-March.

With the options trading about to go live on all the crypto products, the US Bitcoin ETFs are bound to attract new investors, leading to greater demand and stronger inflows. With sustainable ETF inflows, investors could see the price of Bitcoin return to or surpass its March levels.

As of now, the price of Bitcoin stands at around $68,180, reflecting a mere 0.2% decline in the last 24 hours. On the weekly timeframe, though, the flagship cryptocurrency’s value is up by more than 8%.

According to QCP, the upcoming presidential elections in the US could bolster investor appetite for risk-on assets like Bitcoin. “This will propel risk assets higher and support our Uptober narrative,” the firm added.