Crypto asset manager Grayscale Investments is poised to introduce options trading for its spot Bitcoin exchange-traded funds (ETFs) this Wednesday, signaling a noteworthy surge in investor demand for such offerings. This move arrives on the heels of BlackRock’s iShares Bitcoin Trust (IBIT), which witnessed unprecedented trading volumes, catalyzing a notable ascent in Bitcoin’s price to new heights.
Grayscale’s initiative will encompass options trading on GBTC (Grayscale Bitcoin Trust) and BTC (Bitcoin Mini Trust), marking a strategic effort to augment the ecosystem surrounding its U.S.-listed Bitcoin exchange-traded products (ETPs). The firm’s swift action follows the Options Clearing Corporation’s (OCC) sanctioning of Bitcoin ETF options, prompting Grayscale to promptly update its prospectus for a Bitcoin Covered Call ETF earlier this January.
The underlying strategy aims to generate revenues through a covered call approach, which involves the issuance and acquisition of options contracts on Bitcoin ETPs while leveraging Bitcoin or GBTC as collateral. Bloomberg ETF analyst, Seyffart, highlighted Grayscale’s rapid response to the OCC’s green light, suggesting the asset manager is keen on capitalizing on the burgeoning interest in such financial instruments.
Following the debut of BlackRock’s IBIT options, which saw nearly $1.9 billion in notional exposure exchanged on its inaugural day, the market’s reception underscores the burgeoning appeal of cryptocurrency-related investment products. Seyffart’s observations on the social media platform, X, shed light on the trading dynamics, noting a significant disparity in the investor sentiment, heavily skewed towards anticipations of Bitcoin’s price elevation.
Seyffart attributed the new peak in Bitcoin’s price — soaring to $94,041 on Tuesday — in part to the options activity, illustrating the market’s optimistic outlook. Meanwhile, Bloomberg’s senior ETF analyst, Eric Balchunas, described the trading volume as remarkably unprecedented, drawing comparisons with ProShares’ Bitcoin futures ETF, which, by contrast, saw $363 million in trades, despite being operational for four years.
Grayscale’s latest initiative also follows a landmark legal victory against the Securities and Exchange Commission (SEC) last August, wherein the U.S. Court of Appeals mandated the SEC to reconsider its prior rejection of Grayscale’s bid to transition its Bitcoin Trust into a spot ETF. This ruling signifies a pivotal moment for the acceptance of crypto ETFs, challenging the longstanding regulatory barriers that have impeded their authorization for nearly a decade.