Options on Bitcoin ETF will finally go live in the US by Q1 2025 as stipulated by Bloomberg Intelligence analyst James Seyffart.
While he spoke at the Permissionless Conference on October 9, Seyffart said that though an introduction towards the year’s end is not an impossible feat, the first quarter of 2025 is even closer to a realistic timeline for the launch of these promising high-end financial instruments.
Bitcoin ETFs, which allow investors to gain exposure to Bitcoin without owning the cryptocurrency directly, have been a hot topic in the financial world. The launch of options on these ETFs marks a significant step in legitimizing cryptocurrency investments.
It is worthy of note that the trails have been blazed for options on Bitcoin ETFs, as the SEC allowed NASDAQ to list Options tied to Black Rock’s shares of Bitcoin Trust, IBIT, back in September.
The Final approvals from the Commodity Futures Trading Commission (CFTC) and the Options Clearing Corporations (OCC) inarguably stand out. “Unlike the SEC,” Seyffart noted, “the CFTC and OCC don’t have strict deadlines,” which is a simple way of saying it would in theory take longer.
An options contract is a financial agreement that gives investors the right, but not the obligation, to buy or sell an underlying asset, such as a Bitcoin ETF, at a predetermined price within a specific timeframe.
Bitcoin ETF options were among the first regulated U.S. exchange-listed Cryptocurrency options. Their introduction was considered highly vital because of the OCC’s objective: to mitigate counterparty risks in markets.
These instruments are far irrelevant beyond the cryptocurrency ecosystem.
Financial advisors responsible for over-average investment flows in the $9 trillion ETF market often use options trading to hedge market volatility.
According to a survey by The Journal of Financial Planning, as of 2023 over 10% of the advisers actively employed options in the Management of client portfolios.
Seyffart also added, saying the availability might have a much bigger implication for the mainstream market adoption: “Writing options on ETFs could help advisers get more comfortable with the space.
“He added that volatility, and especially downward price movements, continues to be the biggest deterrent for many potential institutional Bitcoin Investors, and options are one of the best ways to manage those risks.
