The recent introduction of spot Bitcoin ETFs has seen a surge in trading volumes, reaching $10 billion within the first three days of launch. This has sparked speculation about the inclusion of options trading for commodity-based trust shares associated with these new Bitcoin ETFs.
Bloomberg analyst Henry Jim reported on Saturday, January 13, that the New York Stock Exchange (NYSE) has filed for approval to list and trade options on Commodity-Based Trust Shares. If approved, this move could increase trading volume and revenue for NYSE and improve liquidity for the newly introduced Bitcoin ETFs.
Eric Balchunas, Bloomberg’s senior ETF strategist, explained that the 19b-4 filing submitted by the three exchanges is a critical step in enabling the listing of options on spot BTC ETFs. He anticipates approval within approximately two months, drawing parallels with commodity trusts like $GLD, which underwent a similar process. Balchunas believes options trading could become a significant aspect of these ETFs due to the inherent volatility of Bitcoin.
James Seyffart, another Bloomberg strategist, provided insights into the implications of the 19b-4 application, speculating on potential delays in the approval timeline. While the SEC could expedite the process with a first deadline in less than 60 days, potential delays could push the approval timeline to late September or early October 2024.
Meanwhile, Grayscale, the asset management giant, has been a major driver of Bitcoin ETF trading volumes. On Tuesday, January 16, James Seyffart estimated that approximately $594 million would exit $GBTC, resulting in a total outflow of $1.173 billion, despite some other Bitcoin ETFs experiencing inflows. Seyffart expressed skepticism about whether these inflows will be enough to offset the substantial outflow from $GBTC.
In addition to the potential for options trading for spot ETFs, ProShares has submitted new filings for leveraged Bitcoin ETFs. These ETFs will allow investors to take positions in favor of or against the price movements of Bitcoin, expanding the variety of offerings in the market. The intersection of traditional financial markets and the cryptocurrency ecosystem continues to generate interest and drive developments in the industry.
