Grayscale Set to Launch Bitcoin ETF Options Trading Amidst Record Inflows in Competitor BlackRock's IBIT

Grayscale, one of the biggest players in the spot Bitcoin ETF market, is set to kick off options trading tomorrow. Just yesterday, BlackRock’s IBIT started its options trading, and it quickly turned into a “feeding frenzy” with major inflows.

This new options trading could really shake things up in the Bitcoin ETF sector. But Grayscale needs to seize this moment.

According to Grayscale's announcement, options trading for their main products will begin on Thursday, November 21. This includes the original Grayscale Bitcoin Trust (GBTC) and their Mini ETF, launched back in July. Both funds saw a nice bump in value right after the announcement.

Just two days ago, the OCC gave the final green light for options trading on the Bitcoin ETF. This decision sparked immediate excitement as the crypto community eagerly awaited the launch.

In response, Grayscale quickly filed an updated prospectus to detail these new offerings for GBTC and the Mini Trust.

As Richard Teng, CEO of Binance, pointed out, “The introduction of options could also unlock new credit opportunities within the crypto space. Institutional lenders may feel more confident lending against ETF collateral, as options provide clearer mechanisms for valuation and risk assessment.”

However, Grayscale wasn’t the first to jump into options trading. BlackRock took the lead with IBIT, starting their options trading yesterday.

IBIT options trades brought in over $425 million in just a few hours. By the end of the day, that number soared to an impressive $1.9 billion. Eric Balchunas, a Bloomberg ETF analyst, noted, “$1.9 billion is unheard of for Day One. For context, [21Shares’ Bitcoin ETF] did $363 million, and that’s been around for four years. And also, this is with $25,000 contract position limits. That said, $1.9 billion isn’t quite big dog level yet; for example, [gold] did $5 billion today. Give it a few more days/weeks.”

Balchunas also mentioned that “about half” of Bitcoin ETF issuers have surpassed their own inflow records. He called it a “total feeding frenzy.”

Clearly, the demand for options trading has unleashed a powerful shift in the ETF market. With the current bull run in crypto markets, these new products could lead to remarkable gains.

Still, it’s unclear how well Grayscale can take advantage of this opportunity. While IBIT options trading set records, Balchunas pointed out that GBTC is facing significant outflows.

Additionally, Grayscale’s other offerings, like their Ethereum ETFs, have underperformed. They may be late to the options trading scene, which could hinder their ability to replicate the success of others.