Cryptoverse: Bitcoin derivatives traders bet billions on ETF future

economictimes.indiatimes.com:

U.S. regulators are keeping crypto players on the edge of their seats as they weigh whether to give their blessing to bitcoin exchange-traded funds (ETFs).

Derivatives traders are already piling in, though, betting the Securities and Exchange Commission will give the green light to several ETF hopefuls this week and electrify the market.

Open interest, the amount invested in bitcoin futures, has steadily increased since October and leapt to $19.2 billion in early December, its highest level in two years, according to information platform Coinglass. It's now between $17 billon and $18 billion, up from the $9.5-$14.5 billion range seen for most of 2023.

«We eagerly await the SEC's decision,» said analysts at analytics firm Amberdata. «This event has been factored into the options market's pricing since October, creating a heightened sense of anticipation.»

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It's been a long road for U.S.-listed spot ETFs linked to volatile bitcoin, which would allow access to the cryptocurrency via regular stock exchanges in a marriage with mainstream finance that could attract big investors.

Multiple asset managers have applied for permission to launch spot bitcoin ETFs since 2013, but the SEC has rejected them, arguing products would be vulnerable to market manipulation.

But by the end of 2023, a year in which the discussions and lobbying intensified, the SEC was holding talks with firms keen to issue ETFs, raising hopes that the long-awaited funds would hit market and trigger waves of bitcoin investment.

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