Bitcoin’s Surge: US ETF Options Fuel Bullish Bets and Market Optimism

The initial options trades for BlackRock Inc.’s $44 billion iShares Bitcoin Trust suggest that traders anticipate further record-breaking movements for Bitcoin.

Over 350,000 contracts were traded after Nasdaq Inc. listed them on Tuesday, with around 80% of the trades being bullish bets, according to data from Bloomberg. Nine out of the 10 most-traded options were bets on Bitcoin’s price rising. The highest activity occurred in calls set to expire in January with a $55 strike price, followed by December expiry options at $65, which is 25% above the ETF’s closing price on Monday.

Bitcoin reached an all-time high of $94,032 just as the contracts debuted. Some investors believe that US Bitcoin ETF options will attract more inflows into the digital asset, which surged following Donald Trump’s victory in the US election.

Caroline Mauron, co-founder of Orbit Markets, a crypto derivatives liquidity provider, stated, “The volume itself is not large enough yet to drive the direction of the underlying, but positive headlines certainly contributed to a bullish mood.” She went on to add, “This is a good start, demonstrating growing links between the crypto-native ecosystem and the traditional finance world”.

The iShares Bitcoin Trust is the largest Bitcoin portfolio and one of 12 US spot-Bitcoin ETFs. Since its launch in January, it has attracted about $29 billion in net inflows, according to Bloomberg data. Approximately $5 billion of that came after Election Day on November 5.

Trump has pledged to create a favorable regulatory environment for digital assets in the US and establish a strategic Bitcoin stockpile, though the timeline and feasibility of his proposals remain unclear.

Non-US platforms like Binance and Deribit have traditionally handled a significant share of crypto derivatives trading. However, record high open interest in Bitcoin futures hosted by the CME Group, based in Chicago, signals a growing appetite for regulated crypto exposure among US institutions.

Noelle Acheson, author of the Crypto Is Macro Now newsletter, wrote, “Bitcoin has a lively derivatives market, but in the US it is still tiny compared to other asset classes, and is largely limited to institutional players.” Acheson also noted that “a deeper US crypto derivatives market will bring in new investor cohorts and enable a greater variety of investment strategies.”

Bitcoin, the largest digital token, has more than doubled in value this year, pushing the overall crypto market value past its pandemic-era peak, according to CoinGecko data.