BlackRock’s Bitcoin ETF Gets a Boost as SEC Raises Options Cap

This update applies to all ETFs that offer options, which include BlackRock’s iShares Bitcoin Trust (IBIT), but not Fidelity’s Wise Origin Bitcoin Fund (FBTC), according to a report from NYDIG’s head of research, Greg Cipolaro.

The change could make BlackRock’s ETF even more dominant, as it already leads the market in both size and trading activity. Meanwhile, Fidelity’s fund may struggle to keep up, especially in the growing options space.

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Higher limits on options allow investors to use more active strategies, like selling covered calls, where someone holds Bitcoin BTC $90,063.76 and sells a call option on it. This approach can lower risk and limit losses, but it also reduces the potential gains.

Cipolaro pointed out that as price swings decrease, Bitcoin could become more attractive to institutional investors who focus on managing risk across different asset types. These investors may be more likely to buy and hold Bitcoin directly if they see its price movements become more stable.

He also noted that lower volatility leads to more spot purchases, which increases demand and adds to price stability. ETF issuers had asked for this kind of rule change before their products were approved, and now that it is in place, it could affect how ETFs are traded and who can invest in them.

Meanwhile, UK retail investors can buy crypto ETNs again starting October 8 under new Financial Conduct Authority (FCA) rules. What did David Geale say about it? Read the full story.