Are Spot Bitcoin ETF Options Traders Really Expecting $176K BTC Price?
Options on BlackRock's iShares Bitcoin Trust ETF (IBIT) On November 19, the newly launched market made waves as it recorded a turnover of $1.9 billion. On X, few analysts hailed the launch as a success after the day ended with a surprising mix of terms.
There were 288,740 call (buy) options compared to 64,970 sold (put) instruments, or a staggering 4.4:1 ratio.
On the surface, this appears to be incredibly bullish, with some contracts indicating a Bitcoin (BTC) price above $170,000. But is this optimism warranted, or are these businesses more complex than they appear?
How are IBIT Bitcoin options used?
Options are financial instruments that allow traders to play price movements or leverage risks without directly purchasing the underlying asset.
Among IBIT options, a staggering 9,500 contracts of the $100 call expiring on December 20 traded. At first glance, this suggests that traders are betting on Bitcoin heaven. However, these contracts are worth $0.15 each, or 0.3% of IBIT's current price of $53.40. This price implies that the probability of Bitcoin hitting the $175,824 equivalent price is low.
Some investors use these low-cost options like lottery tickets. While eye-catching, these contracts often distort market sentiment.
IBIT ETF options price on November 20. Source: Nasdaq
For a more grounded example, consider a $65 IBIT call option that expires on January 17, with a price of $2.40 per contract (IBIT rate of 4.5%). This trade will be profitable as Bitcoin closes at $114,286, a 22% gain in two months.
Meanwhile, sophisticated traders can use strategies like synthetic longs. An X user “Ashton Checkley” shared an example: selling a $50 call and buying a $60 call at the same price ($2.15), effectively replicating ownership of Bitcoin without holding the asset.
Other strategies include covered calls, where an investor holding IBIT sells a call option for immediate income. For example, with IBIT trading at $53.40, you can sell a $55 call option that expires in January for $5.20. This means the investor collects the money upfront but agrees to liquidate their interest if the IBIT goes above $55. If IBIT closes at $45 or $50, the call ends up worthless, and the investor receives a $5.20 premium, reducing their loss or adding to their return.
“Bull call spread” strategy expected profit and loss. Source: Adma
Similarly, a “bull call spread” targets a modest price increase while limiting risk. A trader can buy a $53 call for $6.20 and sell a $58 call for $4.10, a cost of $2.10. If IBIT closes at $58, the $5 price of the spread will result in a $2.90 profit (5 – $2.10 cost).
Is Bitcoin Price Heading To $170,000 Due To IBIT Options Movement?
The $170,000 Bitcoin price prediction is not a market consensus – it is a result of trading at low costs and high rewards. IBIT options have been flooded with speculative bets, particularly on the February and May 2025 contracts, which show a 6.7:1 call-to-put ratio. However, the probability of such a high result is very low.
Options provide leverage by allowing small investments for outsized benefits. However, they may become worthless if the asset price does not move as expected. For retail investors, the takeaway is clear: Bitcoin ETFs and their alternatives offer new ways to profit, but understanding the mechanics and probabilities is key.
This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.
