QCP Capital: Nasdaq’s Spot Bitcoin ETF Options Launch Signals Institutional Boom
2024-11-21

On 19 November 2024, Nasdaq began listing options on BlackRock’s spot Bitcoin ETF (ticker: IBIT). According to a report by Bloomberg, this launch follows over 10 months of collaboration between Nasdaq, BlackRock, and regulators, including the Commodity Futures Trading Commission (CFTC) and the Options Clearing Corporation.
Alison Hennessy, Nasdaq’s Head of ETP Listings, confirmed the launch, highlighting strong demand from investors seeking greater flexibility in managing Bitcoin exposure. The iShares Bitcoin Trust (IBIT) has amassed over $30 billion in assets since its debut, making it the largest spot Bitcoin ETF in the market.
Eric Balchunas, an ETF analyst at Bloomberg Intelligence, noted that while spot Bitcoin ETFs like IBIT have succeeded on their own merits, the addition of options provides a significant tailwind. Options offer investors a way to express precise views on Bitcoin’s price movement, ultimately driving greater volumes and assets into the product.
In a recent blog post, Singapore-based crypto-focused proprietary trading firm and market maker QCP Capital emphasized the broader significance of this launch in their blog post, pointing out how institutional investors could benefit from regulated derivatives tied to IBIT. They noted that spot Bitcoin ETF options could attract a wave of institutions that face barriers to native crypto options platforms like Deribit.
QCP Capital said that derivatives in traditional markets often grow to 10-20 times the size of the underlying asset’s market capitalization, and a similar trend could unfold in Bitcoin. Institutions may use these options to generate yield on long-term holdings, potentially compressing implied volatility in Bitcoin markets.
Drawing parallels to the growing use of MicroStrategy as a Bitcoin proxy, QCP Capital cited Q3 2024 filings showing a surge in institutional holders of MicroStrategy from 667 to 738. Vanguard alone increased its holdings by nearly 16 million shares—a 1,000% jump.
QCP Capital noted that Bitcoin was stabilizing above $90,000, with the December 100k strike holding the highest open interest among IBIT options. Narrowing implied volatility spreads reflect growing confidence in Bitcoin’s trajectory, potentially setting the stage for upward momentum.
The firm also pointed to broader trends in institutional adoption, such as Goldman Sachs’ plans to spin off its digital asset platform, as further evidence of the integration of digital assets into traditional finance.
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