Bitcoin ETF approval is unlikely to boost the crypto market as suggested by options data
Implied volatility for Jan12 options, linked to the ETF, decreased instead of rising, according to data from Greeks.Live.
Greeks.Live, a platform for trading crypto options, has dampened hopes of a significant price surge after the U.S. regulator approves a spot Bitcoin exchange-traded fund (ETF) with data from its platform.
According to a tweet by Greeks.Live, recent market data from its trading platform indicates that despite speculation about the SEC approving the Bitcoin Spot ETF application next Tuesday, there has been little volatility in major term implied volatilities (IVs) and prices.
Term IV measures the market’s expectation of future price movements in options contracts.
According to a Reuters report, the U.S. SEC could contact the Bitcoin ETF applicants earlier next week. This development is anticipated to be crucial for the crypto market, enabling investors to trade Bitcoin-backed ETFs on regulated exchanges. However, the tweet pointed out the unexpectedly low market activity in reaction to the news.
Options data revealed a decline in implied volatility for Jan12 options linked to the ETF, coupled with notably low trading volume, comprising just 2% of the day’s total turnover. In simpler terms,
Greeks.Live suggests that the market may have already factored in the potential approval of the spot Bitcoin ETF. This implies that market participants could have anticipated the approval and adjusted their positions accordingly, potentially limiting the impact on prices and volatility.
In related news, JPMorgan CEO faced criticism for his involvement in the Bitcoin ETF space amid anti-crypto comments.
Asset managers BlackRock, Valkyrie, and Van Eck submitted amended S-1 forms to the SEC on the final day of consideration in January 2024. Invesco Galaxy, Bitwise, WisdomTree, and Fidelity followed with their Form S-1 applications.
BlackRock’s updated filing identified Jane Street and JPMorgan Securities as “authorized participants” for its proposed spot Bitcoin ETF, using a cash-only model.
BlackRock had previously settled a trade on JPMorgan’s Tokenized Collateral Network service on Oct. 11.
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Bitcoin ETF approval is unlikely to boost the crypto market, as suggested by options data.
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