Bitcoin ETF Approval Doesn’t Trigger Crypto Market Rally – Options Data

Greeks.Live, a crypto options trading platform, has dampened expectations of a big price increase after the US regulator approved a bitcoin exchange-traded fund (ETF) position based on data from the platform.

According to the latest market data released on the trading platform Grix.Live on Twitter, there is little volatility in implied volatilities (IVs) and prices at the main time, despite speculations about the SEC approving the Bitcoin Spot ETF application next Tuesday.

Term IV measures the market's estimate of future price movements in options contracts.

According to a Reuters report, the US SEC may receive Bitcoin ETF applicants as early as next week. This development is expected to be critical for the crypto market, allowing investors to trade Bitcoin-backed ETFs on regulated exchanges. However, the tweet indicated an unexpected low market activity in response to the news.

There is news in the market that the SEC will pass the Bitcoin Spot ETF application next Tuesday, but there was little volatility in the main IVs and the price. Looking at options data, Jan12 options IV, which is strongly related. To ETF, fell… pic.twitter.com/f1B4ZPC05d

— Greeks.live (@GreeksLive) December 31, 2023

Options data showed that implied volatility for Jan12 options, which are closely tied to ETFs, fell rather than rose. Moreover, the trading volume of these options is very low, which is only 2% of the total trade of the day.

Related: JPMorgan CEO Criticizes Role of Bitcoin ETF Amid Anti-Crypto Comments

Based on these insights, the Greeks.live market was able to foresee the potential approval of the spot Bitcoin ETF. Simply put, participants in the market would have expected the event and adjusted their positions accordingly, so that its actual approval would have some impact on price and volatility.

Asset managers BlackRock, Valkyrie and Van Eck filed amended S-1 forms with the U.S. Securities and Exchange Commission on Dec. 29, ahead of the SEC's January 2024 deadline. Invesco Galaxy, Bitwise, WisdomTree and Fidelity Form S-1 filings will come later.

BlackRock's updated filing lists Jane Street and JPMorgan Securities as “permitted participants” in the proposed spot Bitcoin ETF application. BlackRock said it uses a cash-only model. On October 11th, he was the first user to trade on JPMorgan's Tokenized Collateral Network service.

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