The US Securities and Exchange Commission (SEC) has raised the limit on how many options contracts can be held for exchange-traded funds (ETFs) by increasing the cap from 25,000 to 250,000.
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
$114,605.72
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.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
