Bitcoin Spot ETF Options Trading Begins on New York Stock Exchange

Options products based on Bitcoin spot exchange-traded funds (ETFs) listed on the New York Stock Exchange began trading for the first time on the 19th (local time). Bitcoin, which has shown the so-called 'Trump rally' since the U.S. presidential election, hit another all-time high.

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According to Bloomberg News, the Nasdaq exchange launched options trading for the Bitcoin spot ETF 'iShares Bitcoin Trust' (IBIT), managed by asset management firm BlackRock, on the same day. Options are derivative financial products that grant the right to buy or sell specific assets such as commodities or securities within a certain period under predetermined contract conditions. Investors can bet on Bitcoin price increases (buy call options) or hedge against price declines (buy put options) at a lower cost than the underlying asset price. Option sellers can sell options at an appropriate price (premium) in the market.

According to the financial media Barron's, 85% of the Bitcoin spot ETF options traded during the day were call options betting on Bitcoin price increases. Experts expect that Bitcoin spot ETF options trading will help institutional investors hedge risks related to Bitcoin investments. Alex Sohn, Head of Research at cryptocurrency investment firm Galaxy Digital, said, "Options trading helps mitigate Bitcoin's volatility, and reduced volatility will allow investors to take larger positions."

Bitcoin prices have been soaring since the election victory of U.S. President-elect Donald Trump. According to the U.S. cryptocurrency exchange Coinbase, the price of one Bitcoin briefly surpassed $94,000 for the first time on the day. This is a new all-time high in just six days. Considering that the price was below $70,000 on the morning of the 5th, the election day, it has risen about 35% in just two weeks. As of 6:30 p.m. Eastern Time, Bitcoin prices were hovering around $92,100.