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SEC's ETF regulations trigger a $22B wave of Bitcoin expiry volatility

SEC's ETF regulations trigger a $22B wave of Bitcoin expiry volatility

Bitget-RWA2025/09/25 21:32
By:Coin World

- Bitcoin dropped below $109,000 as traders braced for a $22B options expiry, heightening volatility and liquidity demands. - SEC's approval of crypto ETF standards accelerated product launches, with BlackRock's IBIT holding $88B in BTC assets. - ETF inflows and institutional capital boosted Bitcoin's resilience, but expiry risks rebalancing and short-term turbulence. - Regulatory innovations like in-kind ETF mechanisms aim to ease liquidity pressures while expanding altcoin ETF options. - Staking capabili

SEC's ETF regulations trigger a $22B wave of Bitcoin expiry volatility image 0

On Friday, Bitcoin dropped below $109,000 as the market braced for the $22 billion

(BTC) options expiration, an event anticipated to heighten both volatility and liquidity needs. The decline occurred amid increased activity in crypto derivatives, with institutional investors adjusting their strategies ahead of the expiry. Experts pointed out that this event could spark notable hedging and speculative moves, especially as Bitcoin-linked exchange-traded funds (ETFs) continue to gain momentum in the U.S.

Recent regulatory changes have also influenced the market. The U.S. Securities and Exchange Commission (SEC) has approved broad listing standards for cryptocurrency ETFs, making it easier for funds tied to digital assets beyond Bitcoin, such as

and Dogecoin, to gain approval. This regulatory shift has sped up the introduction of new ETFs, with companies like Grayscale and at the forefront. BlackRock’s iShares Bitcoin Trust (IBIT), which leads the market in assets under management, currently holds 748,968 BTC valued at $88 billion, according to the latest figures. The company’s strong position has fueled competition, with Fidelity’s Wise Origin Bitcoin Fund (FBTC) also drawing substantial inflows.

The SEC’s decision to allow options trading on BlackRock’s

ETF beginning in September 2025 has added further complexity to the market. These physically settled Bitcoin options provide investors with new tools for hedging or speculation. However, the upcoming options expiry brings uncertainty, as traders consider the potential for significant liquidations or portfolio adjustments. Analysts such as Nic Puckrin from The Coin Bureau have noted that the updated regulatory environment lowers entry barriers for crypto ETFs, paving the way for quicker launches and deeper markets.

Investors are closely watching the relationship between ETF inflows and Bitcoin’s price trends. BlackRock’s ETF alone represents about 60% of U.S. Bitcoin ETF assets, with total assets under management surpassing $64 billion. The surge of institutional investment has helped support Bitcoin’s price despite broader economic challenges. Still, the $22 billion options expiry could introduce short-term price swings as market participants reassess their risk exposure.

The crypto ETF sector is growing rapidly, with 31 spot altcoin ETF applications expected in 2025. This trend signals rising institutional trust in digital currencies, though individual investors remain wary. The SEC’s latest rule updates, such as in-kind creation and redemption processes, are designed to boost efficiency and minimize tracking discrepancies for ETFs. These changes may help ease some of the liquidity strains linked to the options expiry.

Looking forward, the potential approval of staking features for

ETFs and ongoing talks about tokenizing securities point to continued regulatory progress. BlackRock’s ongoing discussions with the SEC on these matters highlight its commitment to bridging crypto and traditional finance. While the $22 billion expiry poses immediate hurdles, the outlook for crypto ETFs remains strong, with analysts predicting ongoing growth in assets and market engagement.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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