The U.S. Securities and Exchange Commission (SEC) has significantly raised the option contract limit for Bitcoin Exchange-Traded Funds (ETFs), which is expected to further strengthen the market dominance of BlackRock's flagship ETF, the iShares Bitcoin Trust ETF (IBIT). Analysis suggests that this measure could adversely affect competing ETFs that are already far behind IBIT.
The SEC this week raised the position limit for all option-holding ETFs from 25,000 to 250,000 contracts. While IBIT was included in this measure, Fidelity's Wise Origin Bitcoin Fund (FBTC) was reportedly excluded. Greg Cipolaro, Head of Research at cryptocurrency financial services firm NYDIG, noted in a report that "this decision could further widen the gap for IBIT, which already holds an overwhelming market advantage," and "meanwhile, FBTC risks weakening its position in the options market despite being the second-largest Bitcoin ETF".
Currently, IBIT is managing assets totaling $85.5 billion (approximately 118.985 trillion won), which is more than four times larger than FBTC, which manages $21.35 billion (approximately 29.6665 trillion won). Consequently, observations are gaining momentum that the benefits of this options position regulation relaxation are likely to be concentrated on IBIT.
Cipolaro also analyzed that the SEC's decision could lower Bitcoin's price volatility and stimulate spot demand. He explained, "This change enables more aggressive derivative strategies such as covered call selling (a call option strategy based on held assets)" and "such strategies will limit downside risk while also readjusting profit margins, thereby increasing market stability".
Ultimately, this expansion of the options ceiling is likely to be more than just a regulatory change, potentially becoming a turning point in the strategic landscape of the Bitcoin ETF market. The industry is watching how far BlackRock's advance will go and what response strategies the late entrants will develop.
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