CBOE Predicts Surge in Institutional Investors with Bitcoin Spot ETFs Approval
Summary:
The Chicago Board Options Exchange (CBOE) anticipates that Spot Bitcoin exchange-traded funds (ETFs) will usher in an influx of institutional investors, expanding Bitcoin derivatives products. CBOE Digital plans to launch margined Bitcoin and Ether derivatives trading on January 11. Additionally, mutual funds, like Advisors Preferred Trust, are considering increasing their investment in Bitcoin, setting the stage for greater exposure to approved Bitcoin ETFs.
The Chicago Board Options Exchange (CBOE), the largest options exchange in the U.S., anticipates that Bitcoin (BTC) Spot exchange-traded funds (ETFs) will draw a novel influx of institutional investors. CBOE Digital's president, John Palmer, stated in his interview on Bloomberg TV on January 2, that such approval would stimulate a fresh wave of interest from institutional and retail investors into Bitcoin derivatives. He added that the approval would facilitate the inflow of investments from pension and RIA-based funds into a spot Bitcoin ETF, a privilege currently unattainable for these funds. An RIA, or a Registered Investment Advisor, is a firm registered with federal or state regulatory bodies to offer Investment advice.
Palmer's statements were made a week prior to the SEC's deadline on January 10, which is obligated to decide on the approval of the ARK Invest 21 Shares Bitcoin ETF application. Furthermore, Palmer anticipates an expansion of Bitcoin derivatives products following the possible approval of a spot ETF. According to him, institutional entities will increasingly turn to these derivatives for risk hedging.
While he refrains from predicting the precise investor breakdown, Palmer notes that it is usually the institutions that pioneer the use of hedging tools, though he anticipates retail investors will also follow suit. CBOE Digital, the crypto arm of the exchange offering crypto futures and options trading, plans to commence margined Bitcoin and Ether derivatives trading on January 11. This would allow investors to trade contracts without providing full collateral.
In addition, a few mutual funds have begun discussing tactics to amplify their exposure to spot Bitcoin ETFs upon approval. On January 2, the mutual fund manager Advisors Preferred Trust stipulated in its prospectus that the fund "may invest up to 15% of its total assets to indirectly gain exposure to Bitcoin, through shares of Grayscale Bitcoin Trust, ProShares Bitcoin Strategy ETF, and Bitcoin futures contracts." Other funds registered as securities currently traded on NASDAQ are also modifying their prospectuses to indicate potential exposure of 15-50% of their Assets under Management to Bitcoin, via the Spot Bitcoin ETFs.
Published At
1/3/2024 8:51:00 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.