Investors are paying the highest price since early April for protection against potential price drops in BlackRock's spot Bitcoin ETF (IBIT). This surge in demand for put options, which act as insurance against market downturns, indicates growing investor apprehension about the ETF's immediate future.

Key Takeaways

• The cost of insuring against price slides in BlackRock's Bitcoin ETF has reached its highest point since the April market correction.

Rising Cost of Protection

The spread between implied volatilities for 25-delta put and call options on the iShares Bitcoin Trust ETF (IBIT) widened to 4.4 on Monday. This marks the broadest gap seen since April 10, according to data from Market Chameleon. A wider spread signifies that put options, designed to protect against price declines, are trading at a significant premium compared to call options, which represent bullish bets.

Market Sentiment and IBIT's Performance

This increased demand for downside protection suggests a growing concern among investors regarding IBIT's near-term outlook. The ETF experienced a price gap lower at $65.72 on Monday, mirroring overnight losses in the spot Bitcoin market. As of this report, IBIT shares were trading at $65.44, reflecting a 1.51% decrease for the day. This comes after the ETF reached a record high of $69.89 just last week, according to TradingView data.

Sources:

• Insurance Against Price Slides in BlackRock's Bitcoin ETF Now Costliest Since April Crash
• A Pause In Bitcoin Can Still Be Profitable With This Option On IBIT

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