Spot Bitcoin ETF Options ‘a Matter of When, Not If’

Nasdaq plans to start listing these options imminently, which could potentially drive institutional adoption even more after the SEC’s earlier approvals of spot Bitcoin and Ether ETFs. Meanwhile, Bitcoin ETFs saw six consecutive weeks of inflows, and attracted about $8.95 billion since October. Institutional investors and corporate giants like Genius Group, MicroStrategy, and Semler Scientific are also integrating Bitcoin into their treasuries.

US Inches Closer to Spot Bitcoin ETF Options Launch

The United States Commodity Futures Trading Commission (CFTC)  paved the way for the launch of spot Bitcoin exchange-traded fund (ETF) options. The Options Clearing Corporation (OCC) also confirmed its readiness to handle the new investment vehicles.

In a notice from Nov. 18, the OCC listed its preparations for managing the “clearance, settlement, and risk management” of spot Bitcoin ETFs after the CFTC issued a  staff advisory. ETF analyst Eric Balchunas firmly believes that the notice signals that the launch could be right around the corner. He even suggested that it is now “a matter of when, not if” U.S. exchanges will list these ETF options.

Alison Hennessy, Nasdaq’s head of exchange-traded product listings, announced on the same day that the exchange plans to start listing and trading spot Bitcoin ETF options as soon as Nov. 19. Hennessy pointed to BlackRock’s iShares Bitcoin Trust as one of the key ETFs expected to see large inflows. BlackRock’s fund already gained a lot of attention as one of biggest players in the 2024 ETF market.

The introduction of spot Bitcoin ETF options could be a major milestone in institutional adoption of cryptocurrencies, just like the U.S. Securities and Exchange Commission’s (SEC) earlier approval of spot Bitcoin ETFs in January and spot Ether ETFs in May.

Bitcoin ETFs Hit Six Weeks of Inflows

Spot Bitcoin ETFs have been putting on a stellar performance recently, and maintained their upward trajectory last week. This was very likely driven by a strong cryptocurrency market surge. Between Nov. 11 and 15, spot Bitcoin ETFs attracted net inflows of $1.67 billion, which made it the sixth consecutive week of positive flows. 

This streak brought the total inflows since Oct. 11 to $8.95 billion, raising the total assets under management (AUM) for spot Bitcoin ETFs to $95.4 billion. This now accounts for 5.27% of Bitcoin’s $1.8 trillion market capitalization.

Bitcoin ETF flow (Source: Farside Investors)

BlackRock’s iShares Bitcoin Trust (IBIT) leads the way in cumulative inflows after reaching $29.3 billion, while the Grayscale Bitcoin Trust ETF experienced $20.3 billion in outflows since spot BTC ETFs were introduced earlier this year. The upward momentum was mirrored in other markets as spot Ether ETFs recorded $515 million in weekly inflows, which contributed to a three-week streak that brought total net inflows for Ether ETFs to $682 million.

The rally in Bitcoin ETFs comes as Bitcoin recently reached new all-time highs by surpassing $90,000 for the first time on Nov. 12 and climbing to $92,400 on Nov. 13.

Bitcoin’s price action over the past week (Source: CoinMarketCap) 

Billionaire investor Paul Tudor Jones decided to increase his exposure to Bitcoin through BlackRock’s IBIT by adding $130 million worth of shares in the third quarter. This brought his total holdings to almost $160 million, making him the ninth-largest IBIT shareholder. Other well known investors also boosted their Bitcoin ETF positions as well. Goldman Sachs increased its IBIT holdings by 71% in the third quarter to $710 million. 

Overall, global inflows to crypto exchange-traded products reached $2.2 billion last week, according to CoinShares. On the other hand, the record-breaking highs also triggered some profit-taking, which led to outflows in the latter part of the week.

Bitcoin Adoption Grows Among Corporate Giants

Other companies are also making it a top priority to stock up on Bitcoin. Artificial intelligence firm Genius Group took steps to allocate the majority of its treasury reserves to Bitcoin, starting with a $10 million purchase of 110 Bitcoin at an average price of $90,932 per coin. 

This is the beginning of what the company described as ongoing purchases toward a $120 million Bitcoin reserve target. The decision is a big step in Genius Group’s commitment to holding 90% or more of its current and future reserves in Bitcoin.

Roger Hamilton, the CEO of Genius Group, also revealed the firm’s plan to launch a podcast to guide other companies that may be interested in adopting a Bitcoin treasury strategy, inspired by MicroStrategy’s approach. Hamilton mentioned that there is a lack of clear guidelines for these kinds of transitions and is hopeful that their podcast will empower more companies to explore Bitcoin reserves. 

Genius Group’s stock price over the past month (Source: Google Finance)

Since announcing its Bitcoin treasury initiative, Genius Group’s stock price has seen a slight uptick, and closed Nov. 18 at $0.91, up 22% for the month. Its stock price is, however, still far below its all-time high of $96.80 that was set in June of 2022.

Genius Group is not alone in its pursuit of Bitcoin reserves. MicroStrategy, which is led by Michael Saylor, recently bought an additional 51,780 Bitcoin valued at $4.6 billion. This brought its total BTC holdings to 331,200 Bitcoin. The company also outlined plans to raise $1.75 billion through senior convertible notes at a 0% interest rate to fund even more purchases.

Other firms are also doubling down on Bitcoin. Japanese investment firm Metaplanet holds more than 1,000 Bitcoin and plans to raise $11.3 million through one-year bonds to expand its reserves. Additionally, Bitcoin mining firm MARA Holdings Inc., which was formerly known as Marathon Digital, revealed plans to issue $700 million in convertible senior notes, with $200 million earmarked to repurchase existing notes and the rest to purchase Bitcoin, expand operations, repay debt, and address general business needs.

Semler Scientific Reports 37% Bitcoin Yield

Semler Scientific, a tech solutions provider, reported a Bitcoin yield of 37.3% since adopting its Bitcoin treasury strategy earlier this year. The company uses Bitcoin yield as a key performance indicator to evaluate the success of its Bitcoin acquisition strategy to provide stakeholders with a better understanding of its decision to fund Bitcoin purchases through the issuance of additional shares of common stock.

On Nov. 18, Semler Scientific also announced the purchase of an additional 215 Bitcoin for $17.7 million between Nov. 6 and 15, at an average price of $82,502 per coin, including expenses and fees. With this acquisition, the company’s total Bitcoin holdings reached 1,273, which was bought at a cumulative cost of $88.7 million and an average price of $69,682. With Bitcoin trading at around $89,600, the current value of its holdings is close to $114 million.

Eric Semler, the company’s chairman, pointed out the impressive growth of Bitcoin for stakeholders to prove the success of the treasury strategy. He shared that the 37.3% yield perfectly demonstrates the massive growth potential of their Bitcoin holdings. 

CEO Doug Murphy-Chutorian also shared that the company is “laser-focused” on acquiring and holding the cryptocurrency. The firm is exploring financing opportunities to expand its Bitcoin reserves even more as well.