Debut of Bitcoin ETF Options Stokes Crypto Rally -- WSJ

Dow Jones11-21 01:43

By Alexander Osipovich

Crypto investors are buzzing about this week's debut of options on exchange-traded funds that hold bitcoin, as heavy volumes during the first day of trading in options on BlackRock's popular ETF helped propel bitcoin to a new record high Wednesday of nearly $95,000.

Some $1.9 billion of options on the iShares Bitcoin Trust ETF changed hands on Tuesday, the majority of it in bullish call options that will pay off if bitcoin's price rises, according to data from Bloomberg Intelligence. Options have also been introduced on bitcoin ETFs from Fidelity Investments and ARK Invest, after regulators recently cleared the way for their launch.

Trading data shows that some investors are eyeing an extremely bullish scenario for bitcoin in the coming years: Crypto-trading firm Galaxy Digital noted that there had been about $100 million worth of trades in call options that will pay off if the BlackRock ETF rises above $100 per share in 2026 or 2017. That corresponds to a bitcoin price of around $174,000.

Options are contracts that allow investors to buy or sell an asset-in this case, shares of an ETF-at a specified price. Traders say bitcoin ETF options could help draw more institutional investors into crypto by enabling strategies to hedge against bitcoin's famed volatility.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

November 20, 2024 12:43 ET (17:43 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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