IBIT Options Becoming a Tool for Pro Crypto Traders Betting on BlackRock’s Bitcoin ETF Doubling to $100

Options tied to BlackRock’s spot bitcoin (BTC) exchange-traded fund (ETF) experienced a massive surge in trading volume on their debut day, racking up an impressive $1.9 billion in notional exposure. The overwhelming interest in call options signaled a strongly bullish sentiment, with many traders speculating that the ETF’s price could double to $100.

As of Tuesday’s market close, the ETF was priced at $52.70, but the $100 strike calls saw more than 32,000 contracts traded. Most of this action took place in the December 12 expiry, which accounted for 40% of the total 354,000 contracts that changed hands.

“It’s interesting to see professional traders diving into $100 strikes, which would effectively require a doubling of BTC’s price given IBIT trades near $50,” said Samneet Chepal, a crypto quant researcher, on X.

The activity in these $100 calls aligns with similar trends observed on the crypto options exchange Deribit, where $381 million in notional open interest is tied to a $200,000 bitcoin call. This suggests that investors are positioning themselves for a substantial price increase in bitcoin.

On Tuesday, the most traded IBIT option was the $55 strike call, and overall, call options were four times more popular than put options. This skew towards calls reflects growing optimism that bitcoin’s price could continue to rise, with many participants looking to capitalize on further bullish movements.

A call option provides the holder the right to buy an asset at a predetermined price by a specified date. For traders, this means they are betting on or protecting themselves against an expected price increase in the underlying asset.

The large demand for calls in the U.S. is expected to have significant implications for bitcoin’s market structure. Luuk Strijers, CEO of Deribit, explained that the influx of U.S. investors into the options market will likely create more open interest at key price levels, which could drive greater volatility and lead to a gamma squeeze in bitcoin’s price.

“As U.S. institutions and retail investors enter the space, it will increase open interest in specific strike prices, which could fuel volatility and potential gamma squeezes,” Strijers noted, a view that many market analysts share.