Late on Tuesday, November 19, Bitcoin (BTC) rallied to cross the $94,000 mark after Wall Street rolled out its latest product to enhance cryptocurrency exposure in financial institutions.
Spot Bitcoin exchange-traded funds (ETFs) are now open for options trading and this sparked a BTC rally to $94,000
When the news broke out Bitcoin was up over 4% in the last 24 hours to trade above the $94,000 mark, breaking its previous all-time high of $93,450 which was set last week on November 13.
At the same, the top 20 cryptocurrencies index by market capitalisation - CoinDesk 20 has risen 0.3% with Hedera (HBAR) as the biggest gainer having a 9% surge in the last 24 hours. The biggest loser on the index happened to be Polygon (POL) with a 0.8% decline.
The option trading on Bitcoin ETFs will let crypto investors sell and purchase the digital asset at a predetermined time and specific price. Although Bitcoin trading was already available on the CME, BTC ETF options are a major thing for both financial institutions and retail investors.
The former market insights head at Genesis, Noelle Acheson spoke of this when he tweeted that “a deeper onshore derivatives market will enhance the growing market sophistication”.
According to Acheson, this will reinforce investor confidence in Bitcoin as it brings new cohorts while new trading strategies develop ensuring greater investment variety.
Acheson further elaborated on how financial institutions will benefit from this due to high-volume exposure and greater flexibility.
"Options offer deeper granularity in expressing an investment opinion, and can boost exposure relative to outlay, making them especially attractive to large players,” said Acheson.
While the Bitcoin ETF options trading demand is strong, only 1 of the 11 US-based spot Bitcoin ETFs - BlackRock's IBIT offers this. IBIT has a few hundred million options available and most of the contracts are calls, that is, bets on BTC price surge.
Hence, the spot Bitcoin ETFs going live triggered a BTC rally beyond $94,000 but soon after that price gradually came down to $92,000.
At press time on November 20, BTC was trading at $93,394, up 2.27% in the last 24 hours including a 5.15% surge in its trading volume which reached $76.68 billion and market cap rising to $1.85 trillion.