Greeks.live, a cryptocurrency options trading platform, has cast doubt on the potential for a surge in Bitcoin prices if the U.S. Securities and Exchange Commission (SEC) approves a spot Bitcoin exchange-traded fund (ETF).
According to recent data from the platform, the market showed minimal movement in major term implied volatility (IV) and prices despite widespread speculation surrounding the SEC's potential approval of a spot ETF application on January 9.
Implied volatility on January 12 options, closely associated with the anticipated launch of the ETF, surprisingly declined instead of rising, contrary to expectations. The trading volume on that day was notably low, representing only 2% of the total trading volume. This unexpected lack of market response led Greeks.live to conclude that the market has likely already factored in the possibility of a spot Bitcoin ETF approval. Consequently, market participants appear to have adjusted their positions in anticipation, potentially limiting the actual approval's impact on both price movement and volatility.
Several asset management firms, including BlackRock, Valkyrie, Van Eck, Invesco Galaxy, Bitwise, WisdomTree, and Fidelity, submitted revised S-1 forms to the SEC on December 29. These filings were submitted on the last day for the SEC to consider the forms in January 2024. BlackRock's updated filing specifically names Jane Street and J.P. Morgan Securities as "authorized participants" in its proposed ETF, emphasizing that it will adopt an all-cash model. BlackRock notably initiated the first trade settlement on JPMorgan’s tokenized collateral network service on October 11.
This data suggests that the market response to a potential spot Bitcoin ETF approval might be more muted than expected, as indicated by the subdued movement in implied volatility and trading volume. This cautious market reaction implies that the approval's effect on Bitcoin prices may have already been largely priced in by traders and investors.
