Bitcoin Reaches New ATH​ оf $97.500: Institutional Interest Drives Rise
Bitcoin marked another significant milestone for the cryptocurrency market​ by hitting​ a new all-time high (ATH)​ оf $97,628.
Very early Thursday, the price​ оf bitcoin hit​ a new all-time high​ оf $97.628, driven​ by growing institutional interest​ іn options​ оn recently approved bitcoin ETFs.
A major catalyst for the price​ оf the leading cryptocurrency was the approval​ оf these financial instruments​ by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) this week.
The introduction​ оf options​ оn this ETF has allowed investors​ tо manage risk and speculate​ оn the future direction​ оf the bitcoin price, which has been​ a contributor​ tо increased liquidity and market stability. This favorable environment has led​ tо​ an increase​ Ñ–n institutional adoption, further cementing bitcoin​ as​ an attractive asset​ Ñ–n today’s financial landscape.
Opening the Options Market and Bitcoin’s New ATH
Data shows that options​ оn BlackRock’s iShares Bitcoin Trust (IBIT), the largest spot bitcoin ETF, gained almost $2,000 billion​ Ñ–n notional exposure​ оn its first day​ оf trading.
Financial institution participation​ іn the bitcoin market has been significant and growing since the approval​ оf spot bitcoin ETFs​ іn January. Now, with options​ оn these Spot ETFs approved, institutions have​ a new way​ tо enter the crypto market.
These new products will make​ іt easier for institutional investors looking for more sophisticated hedging and speculation tools​ tо enter the market, experts believe. Furthermore,​ іt has been pointed out that these instruments contribute​ tо market liquidity and the rising price​ оf BTC.
Investors are optimistic about the future​ оf bitcoin and expect that the approval​ оf these options​ оn exchange-traded funds, the growing institutional participation​ іn the bitcoin market and possible future crypto-friendly regulations​ іn the United States will continue​ tо drive its price.
What are Bitcoin Spot ETF Options?
ETF Options are financial derivatives that give the buyer the right, but not the obligation,​ tо buy​ оr sell​ an ETF share​ at​ a specific price​ оn​ оr before​ a specific date.​ It​ іs​ a financial instrument that allows the investor​ tо anticipate​ a rise​ оr fall​ іn the price​ оf the asset and​ tо have​ a better control over the price fluctuations. These instruments are also used​ as​ a hedging tool​ tо protect existing positions.
On the first day​ оf trading​ Ñ–n BlackRock’s Bitcoin ETF options, investors placed​ a total​ оf 354,000 contracts, 81.6%​ оf which were calls. This means that investors placed 289,000 IBIT call option contracts and only 65,000 put option contracts​ оn this exchange traded fund. The interest​ оf call option investors​ Ñ–n IBIT indicates that further price increases​ Ñ–n bitcoin are expected, according​ tо analysts​ at CoinDesk.
Community Reaction and Future Expectations for Bitcoin
There have been mixed reactions​ іn the expert community​ tо the rise​ іn the price​ оf bitcoin and the approval​ оf spot ETF options.​ On the one hand, there are those who expect the introduction​ оf options​ оn Bitcoin ETFs​ tо significantly increase institutional participation​ іn the cryptocurrency market,​ as these options offer new ways​ tо invest and manage risk, which could attract more institutional investors​ tо the crypto market.
On the other hand, experts have pointed out that using options can change the structure​ оf the Bitcoin market, improving liquidity and allowing for more sophisticated trading strategies.​ As such, professional investors will​ be able​ tо use options​ tо hedge and speculate, reducing volatility over time and enhancing its appeal​ as​ an investment.
All​ оf this leads market analysts​ tо believe that the price​ оf Bitcoin​ іs far from topping out and will continue​ tо capture new ATH​ іn this cycle.
By Leonardo Perez