As a seasoned crypto investor with over a decade of experience in the volatile world of digital assets, I can confidently say that the recent approval for spot Bitcoin ETF options trading by the U.S. Commodities and Futures Trading Commission (CFTC) is nothing short of groundbreaking. Having witnessed numerous regulatory hurdles and setbacks, it’s heartening to see this significant milestone finally materialize.
The U.S. Commodities Futures Trading Commission (CFTC) has given its approval for trading Bitcoin ETF options, paving the way for the listing of Bitcoin options products. This move will increase visibility of Bitcoin ETFs on Wall Street, but the final approval is yet to come from the Office of the Comptroller of the Currency (OCC).
CFTC Clears Path for Spot Bitcoin ETF Options
With the U.S. Commodity Futures Trading Commission (CFTC) paving the way for options trading on Bitcoin Exchange-Traded Funds (ETFs), Eric Balchunas, a senior ETF analyst at Bloomberg, expressed optimism towards cryptocurrency on November 16. In the formal declaration, CFTC highlighted that its Division of Clearing and Risk (DCR) had thoroughly examined the situation prior to the approval. This is what they pointed out:
According to DCR, the listing of these shares on stock exchanges regulated by the Securities and Exchange Commission (SEC) does not fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC). As a result, the clearing of options related to these shares through the Options Clearing Corporation (OCC) would be done within its capacity as a registered clearing agency, overseen by the SEC.
If Bitcoin ETF options are approved, institutional investors and traders will have the opportunity to handle risk and boost their involvement in Bitcoin’s price fluctuations through options contracts. These financial derivatives enable holders to possess the right, but not the duty, to purchase or sell Bitcoin at a fixed price and within a defined time period.
The final say on whether to approve Bitcoin ETF options now rests with the Options Clearing Corporation (OCC). Eric Balchunas stated that given their interest, it’s likely they will list them very shortly.
Recently, the U.S. Securities and Exchange Commission (SEC) gave its approval for options trading of spot Bitcoin ETFs on the NYSE and Cboe exchanges. Now, with the Commodity Futures Trading Commission (CFTC) also giving its approval, this signifies a significant regulatory milestone for those eagerly awaiting the launch of Bitcoin options trading.
Will Options Trading Create Major Frenzy?
Investing in Bitcoin ETF options provides flexibility for investors to devise various approaches for optimizing their investment portfolios, as they can effectively wager on Bitcoin’s price fluctuations. This method also enables investors to invest smaller amounts compared to purchasing Bitcoin itself or the related ETF shares directly.
Beyond its primary function, this tool also serves as a protective barrier against potential losses. Options serve as a method to shield your current Bitcoin or Bitcoin ETF holdings from possible drops in value. Moreover, strategies such as covered calls can generate extra income from your existing Bitcoin-related investments. As for the BlackRock Bitcoin ETF, speculation that it will reach $100K is growing stronger and stronger.
Given all these advantages, it’s expected that Bitcoin ETF choices will likely spark even more enthusiasm and interest in this investment option. Furthermore, Bitwise Chief of Alpha Strategies, Jeff Park, appears to be quite enthused about this progress.
As CFTC provides clearance today (OCC next), Bitcoin ETF options are sooner than you think.
Re-sharing the key points highlighting the major shift in Bitcoin’s market structure, a transformation as substantial as the introduction of the Bitcoin ETF.
Read this and be prepared: the monetization of time is accelerating.
— Jeff Park (@dgt10011) November 16, 2024
Over the past two days, Bitcoin ETFs have experienced withdrawals instead of influxes, following Donald Trump’s election victory back in early November. Approximately $400 million has been withdrawn during this period, with Fidelity’s FBTC accounting for most of these outflows, according to Farside Investors.
Furthermore, the Bitcoin price, showing resilience, has registered a 3.79% increase within the last day. At the moment of reporting, it surpassed the $91,000 mark.
According to renowned analyst Ali Martinez, Bitcoin could potentially reach $100,680 if it manages to close above $91,900 for the current week. However, it’s worth mentioning that earlier in the week, Bitcoin indicated a sell signal, as noted by him.
According to the TD Sequential, a sell signal has appeared on Bitcoin’s daily chart, but this signal may no longer hold if Bitcoin manages to close the day above $91,900. If that happens, Bitcoin could potentially climb towards $100,680!
— Ali (@ali_charts) November 16, 2024
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2024-11-16 09:44