Key Takeaways
- The price of Bitcoin has recorded yet another all-time high after hitting $94,000, continuing its remarkable assent following pro-crypto presidential candidate Donald Trump’s landslide victory in the US elections.
- The latest rally was driven by two factors: Trump Media & Technology Group announcing plans to acquire crypto trading platform Bakkt, and BlackRock’s successful launch of options trading for its spot Bitcoin ETF – iShares Bitcoin Trust ETF (IBIT).
- According to reports, IBIT saw $1.9 billion in notional exposure via 354,000 contracts on day one, bringing the net inflow into the ETF to a grand total of nearly $3 billion, its highest in a single day.
- Bitcoin’s ascent to the $90,000 range has helped the apex cryptocurrency surpass silver in market capitalization. BTC now has a market cap of $1.85 trillion.
The price of Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, reached a new all-time high of $94,000 on November 19, continuing its historic assent in the two weeks since Donald Trump was declared the winner of the U.S. presidential elections.
BTC Hits New All-Time High of $94,000 As BlackRock Allows Options Trading on Its Bitcoin ETFs
Bitcoin is on a streak of breaking all-time highs, registering a price above $93,000 last week, and has been teetering around the $90,000 range for at least a week.
On the night of the election, the highly volatile digital asset soared nearly 35% to surpass its peak valuation of $73,798, recorded in March. The flagship cryptocurrency’s momentum is driven by the market optimism that President Trump will deliver on his promise of supporting the industry with regulatory policies that will benefit the asset class.
There were a couple of factors that may have helped push Bitcoin to new highs. On Monday, the Trump Media and Technology Group – a media company majority owned by the President-elect – revealed that it was in discussions to acquire crypto trading platform Bakkt. While details of the deal are yet to be revealed, the news was bullish for the market, resulting in several leading cryptocurrencies surging in price.
At the same time, Wall Street giant BlackRock added the feature to conduct options trading on its spot Bitcoin exchange-traded fund (ETF) – the iShares Bitcoin Trust ETF (IBIT). The BTC options trade on IBIT saw an inflow of almost $2 billion, which may have supported Bitcoin’s rally to $94,000.
Bloomberg senior ETF analyst Eric Balchunas reported that the final tally of IBIT’s first day of options trade was $1.9 billion in notional exposure traded via 354,000 contracts. He noted that the number is “unheard of for day one” and compared it to the inflows on the first ever ETF offering exposure to BTC for US investors – the ProShares Bitcoin Strategy ETF (BITO) which recorded $363 million in inflows on day one.
The new feature allows investors to trade IBIT shares, which are backed by Bitcoin, at predetermined prices, enabling them to bet on its price movement. Notional exposure is calculated by multiplying the number of options contracts held by the number of shares each contract represents, and then by the current market price of the underlying asset, which in the case of IBIT is Bitcoin.
The put/call ratio for IBIT options on the first day was 0.225, which meant investors buying calls that bet on the price of BTC to rise far outweighed contracts that bet it wouldn’t. Blachunas said he is bullish on the price of Bitcoin as the contracts set to expire in a month are betting on the flagship cryptocurrency to double.
Ran Neuner, former host at CNBC Africa, agreed with Balchunas’s assessment that the launch of options trading on BlackRock’s IBIT contributed to the crypto market rallying. He said that as traders bought the options, market markers accumulated IBIT shares to “hedge the trade”, resulting in a huge net buying of the ETF that caused a huge net buying in BTC.
Bitcoin ETF Options Could Push BTC Beyond $100,000 Before The End of 2024
Prominent crypto advocate and head of Bitcoin self-custody solutions provider Theya, Joe Consorti, said the options contracts on spot Bitcoin ETFs were a “huge deal” as they opened the doors to the “largest and deepest liquidity pools on the planet”. He expects the BTC to surpass the coveted $100,000 mark before the end of the year.
Meanwhile, crypto asset manager Grayscale is also preparing to launch options trading for its Grayscale Bitcoin Trust ETF this week.
Bitcoin’s unprecedented surge past the $90,000 mark has pushed its market capitalization to $1.8 trillion, eclipsing the total value of the global Silver market. Analysts are also anticipating spot Bitcoin ETFs to surpass the market cap of gold ETFs within the next two months.
Record-breaking capital inflows into the spot Bitcoin ETFs, which now hold over 1 million BTC – worth approximately $93.26 billion at current prices – have positioned the funds in line to topple gold ETFs five years ahead of initial projections.
This momentum was exemplified when BlackRock’s IBIT overtook the asset under management (AUM) of the company’s iShares Gold ETF (IAU), achieving the milestone in less than 10 months, while IAU reached the same level after two decades of trading.
At the time of writing, Bitcoin (BTC) is trading at $93,267 – up 1.62% in the last 24 hours.
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