Options on bitcoin ETFs to begin trading today

That was fast. Options on spot bitcoin exchange-traded funds will start today, less than a year after the funds came into existence.

Bloomberg reported that Nasdaq will list options on BlackRock’s $43 billion BlackRock’s iShares Bitcoin Trust, “allowing investors to use derivatives to bet on or against the world’s largest digital asset.” Last night, Barron’s reported that a Nasdaq spokesperson confirmed the move. 

The Securities and Exchange Commission approved spot bitcoin ETFs in January and approved spot ethereum ETFs later this year. Bitcoin ETFs have garnered immense interest, with The Block reporting they have surpassed $500 billion in trading volume since launch. 

Options on these ETFs will enable crypto investors to have more flexibility with investment strategies, including the ability to hedge and speculate on bitcoin market movements.

The listing comes as interest in crypto, particularly bitcoin, has spiked following a postelection rally that’s seen the price of BTC pass $92,000. 

Sylvia Jablonski, CEO and CIO of Defiance ETF, said that the availability of options on bitcoin ETFs would likely continue to feed the popularity and volume of these funds. That, in turn, could affect the underlying asset’s price.

“Having options listable on BTC funds allows investors to manage risk, generate income by selling covered calls or puts, credit spreads, and even leverage their returns,” Jablonski said.

Jablonski said that options on the ETFs could provide added flexibility for investors looking to gain bitcoin exposure or hedge their crypto holdings.

“Also, in my experience, once options list, both the options and underlying asset tend to see an uptick in volume,” Jablonski said.

Yaël Bizouati-Kennedy is a financial journalist who’s written for Dow Jones, The Financial Times Group, and Business Insider, among others.