BlackRock Bitcoin ETF options see ‘unheard of’ $1.9B traded on first day

Options contracts on BlackRock’s spot Bitcoin exchange-traded fund (ETF), the iShares Bitcoin Trust ETF (IBIT), saw almost $2 billion in total exposure traded, which may have helped push Bitcoin to its new high of over $94,000.

“Final tally of IBIT’s first day of options is just shy of $1.9 billion in notional exposure traded via 354,000 contracts,” Bloomberg ETF analyst James Seyffart reported on Nov. 20.

“$1.9 billion is unheard of for day one,” Bloomberg’s senior ETF analyst Eric Balchunas said, comparing it with the first ETF offering Bitcoin exposure in the United States — the ProShares Bitcoin Strategy ETF (BITO) — which did $363 million.

The new options contracts give investors the right to trade shares of the ETFs at predetermined prices, allowing them to bet on its price movement. Notional exposure measures the market exposure from the option position, accounting for the price changes relative to Bitcoin and the total value of the cryptocurrency controlled by option contracts.

The put/call ratio for IBIT’s first day of trading was 0.225, meaning investors buying calls that bet Bitcoin would rise far outweighed those wagering on puts, those contracts betting it wouldn’t.

Balchunas added that it “seems very bullish,” especially contracts set to expire in a month’s time “which is basically betting price of BTC will double in the next month.”

Former CNBC Africa host Ran Neuner agreed that the launch of the IBIT options caused today’s market pump.

“As traders buy these options, market makers buy the spot ETF to hedge the trade,” he said. “The result is huge net buying of the ETF that causes huge net buying in spot BTC.”

On Nov. 19, industry executive Joe Consorti said the contracts were a huge deal as the listing options on spot BTC ETFs “opens the doors to the largest and deepest liquidity pools on the planet.”

“The market is bullish that Bitcoin’s price ends the year well over $100k,” he said on Nov. 20 after the options launched.

Meanwhile, crypto asset manager Grayscale is also preparing to launch options for its spot Bitcoin ETFs on Wednesday, Nov. 20, in the United States.