CBOE Foresees Spot Bitcoin ETF as Gateway to Pension Fund Investments

CBOE Digital President bullish on Spot Bitcoin ETF

John Palmer, president of CBOE Digital, expressed confidence in the prospect of institutional interest surging with the approval of a Spot Bitcoin ETF. He noted that this approval would provide an entry point for pension funds and RIA-based funds to invest directly in Bitcoin assets, a move currently impeded due to limited avenues for direct exposure.

SEC's Bitcoin ETF decision could drive derivatives market growth

The interview on Bloomberg TV highlighted the potential significance of the upcoming SEC decision regarding the ARK Invest 21 Shares Bitcoin ETF application, due by Jan. 10. Palmer stressed that this approval could potentially catalyze a broader expansion of Bitcoin derivatives products. As institutional players increasingly seek ways to mitigate risks, the derivatives market is likely to experience substantial growth.

Palmer also emphasized that while institutional investors are expected to lead in adopting hedging tools, retail investors are likely to follow suit in seeking similar opportunities.

CBOE Digital, the crypto arm of the exchange, is poised to introduce margined Bitcoin and Ether derivatives trading starting Jan. 11. This initiative will enable investors to trade contracts without providing the full collateral.

Concurrently, mutual funds are gearing up for exposure to spot Bitcoin ETFs. Advisors Preferred Trust recently adjusted its prospectus to potentially allocate up to 15% of its total assets indirectly to Bitcoin exposure through shares of Grayscale Bitcoin Trust, ProShares Bitcoin Strategy ETF, and Bitcoin futures contracts. This move signals an increasing interest in Bitcoin-related investment opportunities among traditional investment vehicles like mutual funds.