Cboe Launches Bitcoin ETF Options linked to its ETF Index

Cboe Global Markets Inc. announced plans to introduce the first cash-settled index options tied to Bitcoin’s spot price. 

Cboe’s Bitcoin ETF options will debut on December 2 and will be based on its ETF Index, which tracks a group of US-listed spot Bitcoin exchange-traded funds.

Bitcoin ETFs Options Continue to See Interest from Institutional Investors

This development comes shortly after Nasdaq listed Bitcoin ETF options, allowing investors to speculate on Bitcoin’s price movement or manage risk through derivatives.

Crypto derivatives, including options and futures, have traditionally been traded outside the United States due to regulatory hurdles. 

However, increasing demand and a favorable stance toward cryptocurrency adoption have encouraged major U.S. exchanges to expand their offerings in the sector.

“We expect the unique benefits of cash-settlement, combined with the availability of various index sizes and FLEX options, will give customers more flexibility in their trading strategies,” Cboe stated in its press release. 

Earlier this week, Grayscale joined the trend by starting options trading for its GBTC and BTC Mini ETFs. Meanwhile, BlackRock’s IBIT options trading set a record on its first day, with over $425 million in trades.

Overall, spot Bitcoin ETFs continue to gain significant traction, now accounting for 5.33% of all mined Bitcoin. Bitcoin price peaks in March and November coincided with $4 billion in ETF inflows, highlighting a strong connection between ETF demand and price accumulation.

“Options are expanding the ecosystem, bringing more traders involved, and bringing more liquidity. And liquidity is big fish bait. So, you should see more institutions using not only options but the ETF itself because of the advent of options being available,” ETF analyst Eric Balchunas said in a recent podcast. 

Bitcoin ETF trading volumes exceeded $7.22 billion earlier this month, driven by optimism surrounding regulatory clarity. Ethereum ETFs also recorded inflows of $295 million, fueled by institutional interest led by firms like BlackRock and Fidelity.

BlackRock’s Bitcoin ETF has further cemented its dominance by reaching $40 billion in assets under management (AUM). This rapid growth places IBIT among the top 1% of ETFs globally by AUM. 

BlackRock’s aggressive acquisition of nearly 9,000 Bitcoin in a single day has further boosted its ETF’s position in the market.

This series of developments signals a growing acceptance of cryptocurrency products within traditional financial markets, with institutional interest driving unprecedented growth in Bitcoin and Ethereum ETFs.