Grayscale, one of the largest spot Bitcoin ETF issuer, will begin options trading tomorrow. Options trading on BlackRock’s IBIT began yesterday, proving to be a “feeding frenzy” with major inflows.
Options trading may transform the Bitcoin ETF sector, but Grayscale will need to take advantage of this interest.
Grayscale ETF Options Trading
According to a new announcement from Grayscale, options trading on its two main products will begin on Thursday, November 21. These include the original Grayscale Bitcoin Trust (GBTC) and its Mini ETF, which was launched in July. Both funds saw a notable increase in value following the announcement.
Two days ago, the OCC gave its final approval to begin options trading on the Bitcoin ETF. This spurred immediate action, as the crypto community eagerly awaited ETF options trading.
Grayscale immediately filed an updated prospectus, which called for these new offerings on GBTC and the Mini Trust.
“The introduction of options could also unlock new credit opportunities within the crypto space. Institutional lenders may feel more confident lending against ETF collateral, as options provide clearer mechanisms for valuation and risk assessment,” said Binance CEO, Richard Teng.
Grayscale, however, was not the fastest issuer to provide options trading. BlackRock, which offers IBIT, the most prominent Bitcoin ETF, began yesterday.
IBIT options trades earned over $425 million in mere hours, but they ended up going much further. According to Bloomberg ETF analyst Eric Balchunas, IBIT options ended at an impressive $1.9 billion.
“$1.9 billion is unheard of for Day One. For context, [21Shares’ Bitcoin ETF] did $363 million, and that’s been around for four years. And also, this is with $25,000 contract position limits. That said, $1.9 billion isn’t quite big dog level yet tho; eg [gold] did $5 billion today. Give it a few more days/weeks,” Balchunas stated.
Balchunas also claimed that “about half” of Bitcoin ETF issuers have broken their own inflow records, and called it a “total feeding frenzy.”
In other words, demand for options trading has unleashed a transformative power on the ETF market. Combined with the existing bull run for crypto markets, these new products could bring unprecedented gains.
However, it remains undetermined how well Grayscale can take advantage of this market. While IBIT options trading broke these records, Balchunas noted that GBTC showed substantial outflows.
The firm’s other products like, Ethereum ETFs, have proved a disappointment, and Grayscale will be late to the options trading party. It may not be able to replicate this success.
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