Kaiko: ETF options are the latest bullish signal for BTC

On November 28, Kaiko released a report stating that ETF options are the latest bullish signal for BTC. Last week, several BTC ETF options made their debut, with BlackRock's IBIT option reaching a nominal trading volume of $1.9 billion on the first day, totaling 354,000 contracts. In comparison, BITO options had a trading volume of $360 million when they were launched in 2021. This strong buying power highlights the robust demand and bullish market sentiment for BTC-linked derivatives.

It is worth noting that over 80% of the initial trading volume of IBIT was call options, reflecting a strong belief in the market about Bitcoin price increases. Trading activity mainly concentrated on near-term expiring options where contracts expiring in December 2024 dominated. The share of IBIT call options greatly exceeded Deribit which is the largest crypto-native option market where call options accounted for 64% of trades.

The launch of BTC spot ETFs could further accelerate institutional adoption. These tools allow investors to hedge risks and devise complex strategies to profit from Bitcoin's volatility. Moreover, they can also promote structured products - customized investments offering specific risk-return characteristics typically developed by large financial institutions - potentially attracting new capital and experienced institutional traders.