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SEC increased the number of options for authorized options from 25,000 to 250,000 on Tuesday for all ETFs with options “, which included the Fet Ishares Bitcoin Trust (IBIT), but not Fondy Origin Bitcoin Fund (FBTC), the world manager of NYDIG, Greg Cipolaro, in a report.
“The change is likely to expand the monstrous example that Ibit already has on other players, while he hinders FBTC’s position as the second option player,” said Cipolaro.
Ibit has 85.5 billion dollars of assets under management, more than four times more than FBTC, the second largest ETF Bitcoin (BTC) by assets with $ 21.35 billion, depending on Coinglass.
Options Limits Increase smooth volatility
Cipolaro said that the DSA’s decision to increase the positions of the options on the Bitcoin FNB would probably remove the volatility of Bitcoin and lead to a greater demand for points.
“This change allows a more aggressive implementation of option strategies, such as the sale of covered calls,” he said, where traders sell a purchase option while having the underlying asset, which limits the risk of decrease but also the amount obtained from the trade.
Cipolaro added that the lower volatility makes bitcoin “attractive on a risk basis, potentially resulting in new capital” from institutional wallets looking for exposure to balanced risks.
“The feedback loop of the drop in volatility leading to an increase in the purchase of points could become a powerful engine of sustained demand,” he said.
SEC approvals to the impact of the market
The SEC continued a series of various regulatory approvals linked to FNB on Tuesday, in particular by approving the creation and buyout in kind on the Crypto ETF, allowing the possibility of exchanging actions for the underlying crypto instead of money.
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Cipolaro said it was a “key” ETF that the issuers sought before their products are approved, and now it is, it “will have significant impacts on market structure and access to investors”.
He added that the authorized participants (APS) – financial institutions that manage the creation and buyout of ETF shares – which have no crypto capacities “will probably not be able to take advantage of arbitration activities and offer competitive prices”.
“There are only two AP today, Jane Street and Virtu, who also have corresponding cryptographic entities that can exchange the two sides of the profession,” said Cipolaro, “we expect the brokers (AP) to have cryptographic capacities to acquire or partners to follow.”
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