Pension Fund Investments Could Be Made More Accessible Via Spot BTC ETF

CBOE Digital President John Palmer expresses confidence that the approval of spot Bitcoin exchange traded funds (ETFs) will attract a fresh influx of institutional investors. The Chicago Board Options Exchange, which is the largest options exchange in the United States, believes that the green light for these ETFs will open doors for new institutional and, eventually, retail interest in Bitcoin derivatives.

Significant Expansion

According to Palmer, the approval is set to facilitate pension funds and RIA based funds to invest in assets within a spot Bitcoin ETF, providing a direct exposure that is currently unavailable to many funds. An RIA, registered with federal or state regulatory agencies, offers investment advice.

With the SEC facing a January 10th deadline for deciding on the ARK Invest 21 Shares Bitcoin ETF application, Palmer anticipates a significant expansion in Bitcoin derivatives products if the spot ETF gains approval. He foresees institutional players increasingly relying on derivatives to hedge risks. While the breakdown of investor interest remains uncertain, Palmer notes that institutions are likely to lead in accessing hedging tools, with retail investors following suit.

More Exposure Anticipated

In related news, CBOE Digital, the crypto division of the exchange offering crypto futures and options trading, is scheduled to launch margined Bitcoin and Ethereum derivatives trading on January 11th, allowing investors to trade contracts without providing full collateral. Simultaneously, mutual funds are contemplating strategies to gain more exposure to spot Bitcoin ETFs once approved.

On January 2nd, Advisors Preferred Trust, a mutual fund manager, adjusted its prospectus to potentially invest up to 15% of its total assets indirectly in Bitcoin, utilizing shares of Grayscale Bitcoin Trust, ProShares Bitcoin Strategy ETF, and Bitcoin futures contracts.