BlackRock’s IBIT options debut: Will the hype keep BTC above $94K?

• IBIT options recorded a groundbreaking first day of trading.
• BTC eyes the $100K target after the latest record high.

On the 19th of November, options trading for spot Bitcoin [BTC] ETFs officially went live. This development propelled Bitcoin to a new all-time high (ATH), surpassing the $94,000 mark.

This landmark moment in crypto finance was spearheaded by BlackRock’s iShares Bitcoin Trust ETF [IBIT], the first spot Bitcoin ETF approved for options trading on Nasdaq.

A dynamic day one for IBIT options

The debut of IBIT options witnessed staggering activity, with Bloomberg ETF analyst James Seyffart revealing on X (formerly Twitter) that trading reached nearly $1.9 billion in notional exposure. 

This involved 354,000 contracts, 289,000 calls, and 65,000 puts—resulting in a call-to-put ratio of 4.4:1. Seyffart cited these trades as the primary catalyst behind BTC’s ATH. 

Jeff Park, Head of Alpha Strategies at Bitwise, hailed the day as historic for Bitcoin ETF options trading. He highlighted several notable takeaways, including the establishment of a “volatility smile” early in the day, which widened further by the close. 

Notably, while the BVIV Index showed fluctuating IV moves, it didn’t correlate predictably with BTC price trends. Park pointed out that the 01/17/24 C55 contract traded over 40K, demonstrating deep liquidity.

Meanwhile, the 12/20/24 C100 contract attracted significant early interest, presenting a high-risk vega opportunity. The put/call ratio, sitting at approximately 0.23, revealed a strong preference for upside calls over downside puts.

Contrary to expectations, Park noted that IBIT’s options trading did not reduce interest in MicroStrategy [MSTR] options, which maintained independent momentum and closed higher.

Industry experts weigh in

The crypto industry widely acknowledged the significance of IBIT’s first day. Bloomberg’s Senior ETF analyst Eric Balchunas remarked on X that $1.9 billion in notional exposure was “unheard of” for a debut.

He noted that by comparison, $BITO recorded just $363 million on its launch, despite being in the market for four years.  However, Balchunas added,

“That said, $1.9b isn’t quite big dog level yet tho, eg $GLD did $5b today, but give it a few more days/weeks.”

Nate Geraci, President of the ETF store, emphasized that the availability of options fundamentally changes the market dynamic. He stated that options make it, 

“Much easier & more enticing for institutional investors to enter arena.”

What’s next for Bitcoin?

While IBIT enjoyed a spectacular start, the excitement doesn’t end here. Options on Bitcoin ETFs from Bitwise and Grayscale are set to launch on Wednesday, with additional offerings expected soon.

With Bitcoin hitting $94,000 with the first options trading launch, speculation now turns to whether $100,000 can be next as more products go live.

Recent trends suggest this may be plausible. According to AMBCrypto, BTC’s current trajectory mirrors previous patterns that preceded significant rallies.

Furthermore, Fundstrat Capital’s CIO Tom Lee concurred, predicting the $100K milestone could be crossed sooner rather than later.

Read Bitcoin [BTC] Price Prediction 2024-2025

As the first day of IBIT options trading demonstrated, the evolving Bitcoin market is entering a phase of dynamic growth, with record-breaking milestones seemingly within reach.