From Nasdaq.:

Professional trading firms have taken advantage of new spot bitcoin ETFs, according to John Divine of BlockFills. As bitcoin’s market dynamics evolve, Divine discussed how the introduction of these ETFs impacted pricing trends and trading strategies.

Divine analyzed the market’s response to new spot bitcoin ETFs, noting that the “sell the news” phenomenon was anticipated by traders. He explained strategic moves made by traders, including exploiting the dislocation between bitcoin spot prices and futures contracts post-ETF announcement.

The basis trade strategy became prevalent as the spread between spot bitcoin and January futures widened, offering lucrative opportunities. Professional trading companies capitalized on this by purchasing spot bitcoin and selling futures contracts, injecting liquidity into the market and managing sell-side pressure effectively.

Investors strategically used options to hedge their bitcoin holdings, with call option premiums expanding pre-ETF launch. This allowed for covered call strategies, securing put options at no extra cost to protect against potential cryptocurrency value fluctuations.

Challenges in the adoption of new financial products like BTC ETFs include delays in availability across various venues and the need for analysts and advisors to educate themselves on cryptocurrencies to provide informed guidance to clients. John Divine emphasized the importance of familiarizing with this novel asset class.



Read more: Crypto Trading Executive Outlines Opportunity Between Spot Bitcoin and Futures