Joshua Lim discusses the implications of the SEC's approval of IBIT options in a detailed thread, emphasizing the evolving landscape of cryptocurrency trading and the role of established options markets. He begins by acknowledging the existing liquidity in the crypto options market, particularly highlighting Deribit, which handles approximately $40 billion in notional monthly trading of Bitcoin options, significantly outpacing the CME's $3 billion. Lim points out that while Deribit is an offshore and crypto-native venue, it attracts both retail traders and traditional finance (tradfi) firms, including notable market makers. He notes that these firms are drawn to the healthy margins available in crypto trading, despite their fluctuating interest in the sector over the years. The presence of institutional users on Deribit is also significant, with various trading strategies being employed, such as directional trades and volatility arbitrage. He raises questions about the potential for a short squeeze in Bitcoin options, referencing the historical context of market squeezes and the challenges of manipulating a $1 trillion asset class like Bitcoin. Lim argues that while such squeezes are theoretically possible, they are less likely to occur compared to smaller markets with limited supply. He also discusses the macroeconomic factors that have historically influenced Bitcoin's price movements, suggesting that these factors may overshadow the potential for options-driven price spikes. Lim contemplates the impact of IBIT options on the broader derivatives market, predicting that their introduction will enhance trading volumes and facilitate risk-netting across different products. He anticipates that the influx of traditional finance into the crypto space could lead to a dampening of volatility, as structured products become more prevalent. This could result in a significant increase in the issuance of IBIT-linked notes, further integrating traditional finance with the crypto ecosystem. He also speculates on the potential for an altcoin boom, driven by increased liquidity and margin lending against Bitcoin collateral. Lim believes that the options markets will help in pricing the risks associated with margin lending, making it more attractive for prime brokers to engage with crypto assets. Additionally, he predicts that basis spreads will compress as access to USD funding improves, which would further stabilize the market. In conclusion, Lim emphasizes that while there are risks associated with trading IBIT options, the overall landscape is poised for growth and transformation, driven by the convergence of traditional finance and cryptocurrency markets. The anticipated changes could lead to a more robust trading environment, benefiting both retail and institutional participants in the crypto space.

The SEC will delay its decision to approve or disapprove options trading for BlackRock's bitcoin ETF until April 24, allowing for more time to consider the proposal. It has also delayed decisions on allowing Cboe and Miax Pearl to list and trade options on spot bitcoin ETFs, with their deadlines set for the same date.

The SEC has approved the listing and trading of options for BlackRock's spot bitcoin ETF, iShares Bitcoin Trust, on the Nasdaq. This move demonstrates further mainstream acceptance of crypto, providing institutional investors and traders with more tools to manage and increase their exposure to bitcoin.

Despite perceived SEC disengagement, the precedent set by Bitcoin ETF approvals and similar issues suggests Ethereum ETFs should also be approved for consistency and investor access.

Crypto traders have locked in $345M in bitcoin options expiring shortly after the U.S. elections on November 4, demonstrating a bullish sentiment with twice as many calls as puts. These election-dedicated options show traders expect a significant price rise following elections.

The SEC has filed a proposed amendment complaint against Binance, addressing issues previously dismissed by the court and emphasizing arguments about some cryptos being offered as unregistered securities. The new filing includes more detailed allegations about Binance's role in promoting digital assets, particularly BNB, SOL, ADA, and MATIC, and argues that Binance provides selective information to encourage investment. The SEC also moved away from “crypto asset securities” to emphasize that the associated contracts, not the asset itself, can constitute a security.

The SEC has approved a rule change that paves the way for ETFs that buy and hold ether. The commission approved bitcoin ETFs less than six months ago - those funds have proven a big success for the industry. Many of the companies that sponsor bitcoin ETFs have already started the process of launching an ether fund. The approval of ether ETFs is a sign that the SEC's stance toward crypto may be softening. The approval for ether ETFs does not extend to other crypto projects on the Ethereum network.

Data indicates that BlackRock's IBIT, the largest spot bitcoin ETF, with an average trade size of $13,000, has so far primarily attracted retail investors.

Traditional indicators for cryptocurrency market tops might not be relevant in the current cycle. The increasing influence of institutions like BlackRock on Bitcoin sentiment and the mainstream adoption of crypto could change what traditional market tops look like. Look for broader signals, such as sovereign wealth funds investing in Bitcoin, corporate treasuries diversifying into crypto, crypto company IPOs, and potential crises from over-leveraging or restaking in the sector.

DBS Bank has launched crypto-structured products, including structured notes and options with underlying Bitcoin and Ethereum reserves, after an initial announcement on September 17. They started trading yesterday.

Bloomberg ETF analysts Eric Balchunas and James Seyffart announced that they are hearing that the ETH ETFs could be approved on May 23rd, and upped their odds from 25% to 75%. The approval of an ETH ETF is being seen as an increasingly political issue, especially after the move to overturn the SEC's SAB 121 ruling about crypto custody passed the House and Senate. Upon the news, ETH has increased by over 17%.

The SEC has approved eight spot Ethereum ETFs from issuers, including BlackRock, Fidelity, and Grayscale, months after approving spot Bitcoin ETFs. While the approval of the 19b-4 forms marks a significant step, trading will only start after the S-1 statements have been registered, which may take weeks.

A report by VanEck reveals that approximately $175 billion worth of bitcoin is held by ETFs, nations, and both public and private companies, which makes up about 15% of the total Bitcoin supply. This holding demonstrates increasing institutional interest and acceptance of bitcoin as a viable store of value, with more involvement from hedge funds, asset managers, and endowments.

Senior ETF Analyst at Bloomberg Eric Balchunas speculates that the upcoming Hong Kong Bitcoin ETFs will not have substantial inflows or market effects. The ETFs will not be available to Chinese locals, and the Hong Kong ETF market is only $50 billion. With no big players involved and less liquidity, the market will be less efficient with spreads beyond where Bitcoin normally trades. These factors and relatively high 1-2% fees make this more of a moral victory than a financial one for Bitcoin.

Bitwise has made a significant move in the cryptocurrency market by filing the first S-1 application for an XRP-based spot exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC). This application marks a notable development as Bitwise becomes the first company to seek approval for an ETF that is directly linked to XRP, a cryptocurrency that has gained considerable recognition and longevity in the crypto space. Bitwise's CEO, Hunter Horsley, emphasized that XRP has the potential to attract mainstream investors, highlighting its established presence in the market. In the broader context of cryptocurrency exchanges, there have been notable developments regarding Bybit, the third-largest offshore exchange. Recently, Bybit opened registration and authentication for users in China, a significant shift from its previous policy that strictly prohibited Chinese users from accessing its services. This change comes amid a competitive landscape where other exchanges have already begun catering to Chinese users, raising concerns among Bybit's internal employees about the implications of this decision. Additionally, the cryptocurrency regulatory landscape is evolving, particularly in Hong Kong, which is implementing new compliance policies. While these regulations may not transform Hong Kong into a crypto haven, they do offer a framework that could foster growth and compliance within the industry. The Hong Kong government has outlined key points regarding cryptocurrency compliance, indicating a structured approach to regulation. In terms of operational challenges, Binance has been facing scrutiny regarding its contract approval processes, particularly concerning its stablecoin BUSD. The exchange has been criticized for delays in addressing contract approvals, which has raised concerns about the security and management of user funds. Furthermore, Binance has reportedly begun layoffs, with a significant portion of its workforce potentially affected, although the company maintains that it continues to seek new talent in various departments. Overall, these developments reflect the dynamic nature of the cryptocurrency market, where regulatory changes, competitive strategies, and operational challenges are continuously shaping the landscape. The filing for an XRP ETF by Bitwise, the shift in Bybit's user policy, and the evolving regulations in Hong Kong all contribute to a rapidly changing environment that stakeholders in the crypto space must navigate.

The U.S. SEC has rejected Cboe BZX's filings for two Solana ETFs, following the SEC's stance that Solana qualifies as a security. Despite the setback, the issuers, 21Shares and VanEck, remain active on the SEC's filing system and may consider refiling with revisions arguing that Solana is not a security.

Matt Hougan, CIO of Bitwise, predicts Ethereum ETFs will see $15 billion in net inflows in their first 18 months of trading. In a note sent to clients, he cited ETH/BTC market cap comparisons, international ETF data, and spot/futures arbitrage trading. He believes the lack of staking rewards is a “rounding error” that will not impact demand.

Ethereum ETF issuers are responding to the SEC's feedback on their S-1 forms to address comments by the end of this week. This process typically involves iterative feedback from the SEC before eventual approval for trading.

Austin Campbell discusses the recent developments surrounding Binance and the broader implications for the cryptocurrency industry in the context of traditional finance (tradfi) and regulatory scrutiny. He begins by acknowledging the significant compliance issues that Binance faced between 2018 and 2021, which made it vulnerable to exploitation by bad actors. He draws parallels between Binance's challenges and those faced by traditional financial institutions, highlighting that compliance failures are not unique to crypto but are prevalent in the traditional banking sector as well. Campbell points out that major banks have faced substantial fines for similar issues, yet the consequences for their executives have been minimal compared to what Binance's CEO, CZ, has experienced. He questions the fairness of the regulatory response, suggesting that if the conduct of Binance warrants severe penalties, then similar actions in tradfi should also lead to significant repercussions for bank executives. He argues that the public nature of blockchain transactions makes it easier to detect crime in the crypto space, which can create a misleading perception of the prevalence of crime compared to the opaque nature of traditional finance. Campbell expresses concern that political efforts to combat crime in crypto may hinder progress in addressing financial crime more broadly. He emphasizes that the visibility of crypto transactions does not equate to a higher incidence of crime, and he challenges the notion that the choice of ledger technology is the root of the problem. The discussion also touches on the political landscape, with Campbell criticizing politicians for scapegoating crypto while ignoring more significant issues within the traditional financial system. He suggests that the regulatory focus on crypto may be a distraction from deeper systemic problems and calls for a reevaluation of how financial crime is addressed across both sectors. In conclusion, Campbell presents two possibilities: either the conduct of Binance is not as severe as portrayed, and CZ has been unfairly treated, or the conduct is indeed serious, and regulators have failed to hold traditional financial institutions accountable. He advocates for a more equitable approach to regulation that addresses the root causes of financial crime in both crypto and traditional finance, urging for reforms that prioritize transparency and accountability.

This thread advises investors on making successful bets in crypto, both in terms of direction and sizing. It emphasizes the importance of understanding the intrinsic risks of each investment, matching wagers to market views, and considering the potential of various crypto assets and underlying infrastructures. The thread cautions against 'index' crypto plays, suggesting they offer limited upside, and instead recommends that investors simply purchase Bitcoin and Ethereum for crypto exposure.

According to VanEck's head of digital assets, Matthew Siegel, the Industrial and Commercial Bank of China (ICBC) reportedly calls Bitcoin ‘Digital Gold' and Ethereum ‘Digital Oil.' ICBC acknowledges Ethereum's current scalability problems but expresses optimism about future upgrades. It notes a strong demand for digital assets driving continuous innovation.

The SEC has delayed its decision on BlackRock's proposed Ethereum ETF for the second time, indicating that other similar applications from companies like Fidelity, Invesco, and Galaxy Digital could also face delays. The success of the spot Bitcoin ETFs is increasing interest in Ethereum ETFs. The delay was mostly expected. Experts are confident that a decision, likely an approval, will be reached in May.

Policymakers' opposition to Bitcoin, especially Bitcoin ETFs, is more rooted in concerns about the financial system's stability than investor protection or criminal use. Bitcoin acts as a stark signaling device, highlighting problems with excessive government spending and monetary policy. The ETFs also provide an easy ‘exit ramp’ for all people, which could prove to be problematic for a regime reliant on excessive government spending.

The SEC has asked the court proceeding over its lawsuit against Coinbase to reject Coinbase's petition asking for a new regulatory system for crypto. In March, Coinbase claimed that the SEC does not have the authority to extend securities rulings to apply to crypto. The SEC sees its incremental application of existing regulations to crypto as reasonable and within its discretion.

The Chicago Mercantile Exchange intends to offer spot Bitcoin trading to its clients as demand for the product increases. As a global derivatives powerhouse, it hosts the top Bitcoin futures exchange by open interest, while Binance leads in spot trading volume. A spot market would allow for complex spot and futures strategies to be executed in the same place.

Bitcoin and Ethereum have had similar returns since the cycle bottom, raising questions about whether an ETF would provide much upside. After accounting for GBTC rotations and conversions of spot BTC to ETF, the total true net buying inflow from the BTC ETFs was $5B, which implies $0.84B in net buying for ETH based on analysis. Crypto natives' expectations for the ETF are overinflated, as Bitcoin has a better mind share within institutional investment circles while selling ETH as a tech asset is more difficult.

Bitwise highlights Bitcoin's ability to let users hold and control their wealth independently of centralized institutions. Despite its volatility and lack of governmental endorsement, Bitcoin's value is underpinned by its scarce supply and high demand. Bitcoin skeptics fail to appreciate its resistant nature to censorship and the fundamental market principles that determine its pricing.

MicroStrategy has announced plans to offer another $600 million in convertible senior notes due in 2030 to qualified institutional buyers. The company also intends to provide an option to purchase an additional $90 million aggregate principal amount of the notes. The funds raised from this private offering will be used to purchase additional bitcoin and for general corporate purposes.

Following a week of net outflows, U.S. spot bitcoin ETFs recorded $31 million in net inflows, primarily coming from Fidelity's FBTC and Bitwise's BITB. The inflows occurred as expectations increased around the launch of spot ether ETFs.

Hong Kong's Securities and Futures Commission (SFC) has added crypto exchange Bybit, along with 11 of its products, to its list of suspicious investments. The SFC warned that Bybit is unlicensed and investors risk losing their entire investments on the platform. The move is part of Hong Kong's efforts to balance investor protection with its aim to portray itself as a global crypto hub.