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4 hours ago
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Nasdaq Raises BlackRock Bitcoin Options Cap by 40x to 1 Million

Bitcoin Nearing New All-Time High

  • Bitcoin is approaching a potential new all-time high, driven by derivatives market activity and significant purchases from large holders.
  • Nasdaq has filed to increase options limits for BlackRock's IBIT to 1 million contracts, expanding by 40 times the previous limit.
  • This expansion could facilitate greater institutional participation in Bitcoin markets.

Options Market Expansion

  • The former contract cap of 25,000 was seen as insufficient given rising volumes, with experts suggesting 400,000 as a reasonable baseline.
  • IBIT may now classify as a mega-cap derivative, potentially influencing banks' and funds' structuring of Bitcoin exposure.

Banks and Market Makers Adapt

  • Market makers can now hedge larger positions, possibly reducing spreads and enhancing liquidity.
  • Banks like JPMorgan are preparing Bitcoin-backed structured notes, utilizing BlackRock IBIT as a reference.
  • These products could promote steady institutional flows rather than sporadic spikes.

On-Chain Accumulation

  • Glassnode reports strong buying from holders with 10,000 BTC or more, with an accumulation score of 0.8.
  • The 1,000 to 10,000 BTC group shows positive accumulation for the first time since September.
  • Retail holders with less than 1 BTC are also actively accumulating, marking the strongest trend since July.

Price Action

  • Bitcoin's price recently rebounded from the low $80,000 area, indicating perceived value in that zone.
  • The average cost basis for US spot Bitcoin ETFs is around $82,000, attracting institutional interest during dips.

Market Risks

  • While expanding options caps could stabilize volume sales, market risks remain, including possible price spikes and downside moves.
  • Fluctuations could occur if trading flows decrease or macroeconomic conditions change.