Crypto ETF Options Likely by Q4 2024, But Bitcoin and Ether Prices Could Face Downward Pressure

Following the U.S. Securities and Exchange Commission's (SEC) approval of spot bitcoin ETFs and spot ether ETFs, attention has shifted to the potential for the SEC to greenlight options trading on these funds.

Anticipation is building among analysts and market observers for the launch of options trading on U.S. spot bitcoin exchange-traded funds (ETFs) before the year's end. Despite the excitement surrounding these new investment avenues, the introduction of options trading could bring strategies that might suppress bitcoin's market price.

Crypto ETF Options Expected in Q4 2024, but Bitcoin, Ether Prices Might Face Downward Pressure

Following the U.S. Securities and Exchange Commission's (SEC) approval of spot bitcoin ETFs and spot ether ETFs, attention has turned to the possibility of the SEC permitting options trading on these funds. Expectations are high for approval of options trading on crypto ETFs by Q4 2024, with institutions already filing for the right to begin offering these products. Many market participants believe options are essential for institutional adoption, and in many ways, they're right.

However, options trading could pave the way for price manipulation and downward pressure on bitcoin (BTC). This could have a significant impact on bitcoin's market behavior, particularly through short-selling strategies. In short selling, traders aim to profit from a dip in bitcoin’s price by borrowing and selling the asset, planning to buy it back later at a lower price. If major institutional players begin shorting bitcoin through options, it could create a wave of selling pressure.

The artificial boost in supply might push prices lower, sparking a chain reaction of sell-offs as other market participants respond to the dropping prices. Furthermore, the introduction of derivatives like options could amplify price movements in BTC's spot market. Options allow traders to leverage their positions, potentially causing more dramatic price swings. This increased volatility could scare off new investors, as the higher risk may outweigh potential gains.

A subsequent drop in demand could add to the downward pressure on BTC's price, creating a vicious cycle of volatility and selling that leaves the market open to further manipulation. The options market has been at the center of discussions about the suppression of gold and silver prices, with accusations often directed at large financial institutions for tactics like spoofing.

While options trading on U.S. spot bitcoin ETFs could provide new avenues for hedging and investment, it also brings significant risks to BTC's price stability. This scenario was observed with the launches of bitcoin futures and spot ETFs. The potential for market suppression and heightened volatility could erode confidence among market participants, leading to extended periods of downward pressure on bitcoin's value over time.

What do you think about the possibility of options trading suppressing bitcoin prices? Share your thoughts and opinions on this subject in the comments section below.

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