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Navigating Hedging and Risk Management in Crypto Derivatives! The explosive growth of cryptocurrency markets has led to the rise of various financial instruments aimed at maximizing opportunities while mitigating risks. Among these instruments, crypto derivatives have emerged as a popular way for investors and traders to gain exposure to the volatility of crypto assets without holding the underlying tokens. However, the volatility that makes cryptocurrencies attractive can also introduce significant risks. This is where hedging and risk management become crucial strategies for market participants. What Are Crypto Derivatives? Crypto derivatives are financial contracts that derive their value from an underlying cryptocurrency. The most common types include futures, options, and swaps. These contracts allow traders to speculate on the price movements of cryptocurrencies without actually owning the assets. For instance, a trader can buy a futures contract for Bitcoin (BTC), allowing them ...

The SEC has officially approved options for BlackRock’s iShares Spot Bitcoin ETF. Options are contracts that grant the right to buy or sell an underlying asset at a certain price. The move is a major one for BlackRock’s clients that already participate in the iShares Bitcoin trust. JUST IN: SEC approves options for BlackRock's spot #Bitcoin ETF. — Watcher.Guru (@WatcherGuru) September 20, 2024 Options are critical for institutional adoption of Bitcoin, especially with the highly volatile crypto ETFs. Since their launch in January 2024, Bitcoin ETFs have performed extremely well, with BlackRock and Grayscale’s ETFs leading the pack. In March 2024, the success of Bitcoin ETF and large streams of inflows brought BTC to a new all-time high of $73,000. Options could also arrive for Spot Ethereum ETFs. Last month , Nasdaq and BlackRock filed to add options to their ETH fund. However, that deadline is much further away. If approval is granted, it wouldn’t be until Apr...

US Spot Ethereum ETFs (exchange-traded funds) recorded $39.21 million net outflows yesterday as Nasdaq ISE, LLC files two notices to withdraw proposals to list options on both spot Bitcoin and Ethereum ETFs. The Grayscale Ethereum Trust (ETHE) was the only fund to register outflows on Aug. 15 after $42.52 million left the ETF, according to data from SosoValue . Spot Ethereum ETFs Record Minimal Flows The Grayscale Ethereum Mini Trust (ETH) recorded zero flows yesterday after achieving moderate net inflows of $2.26 million the previous day. Meanwhile, Fidelity’s FETH saw $2.54 million enter its fund. Similarly, BlackRock’s ETHA recorded $770,350 inflows on the same day. All of the remaining ETFs recorded no flows. Yesterday’s outflows brought an end to a three-day positive streak. The total trading activity across the funds did, however, increase to $240.58 million. This uptick in activity follows the $155.91 volume recorded on Aug. 14 and the $190.76 million on A...

A trader has banked millions of dollars with an options bet against Coinbase placed just a day before the Securities and Exchange Commission ( SEC ) issued its suit against the exchange. Earlier this week, the regulator also filed charges against Binance. The trade, made on Monday morning, was spotted by Unusual Whales and was placed via multiple put options bets with a target price of $50 and a total premium of $107,000. The trader is estimated to have made more than $25 million on the trade. Coinbase’s share price was down by nearly 19% on Tuesday morning. The stock began crashing on Monday when rival exchange Binance received its own suit from the SEC and as much as $81 billion worth of crypto was traded. Bitcoin ended 5% down on the day with as much as $300 million worth of liquidations , most of them on the long side. This activity made for one of the most intense days in Crypto this year. Coinbase insiders are still offloading shares Meanwhile, Cathie Wood of Ark I...

ETH price struggles to flip $1,700 to support, but key derivatives data show bulls making plans to break through the resistance. The price of Ether (ETH) rallied 16% between Jan. 14 and Jan. 21, peaking at $1,680 before facing a 5.4% rejection. Curiously, the same resistance level resulted in a substantial correction in late August 2022 and again in early November 2022.  Ether/USD price index, 2-day. Source: TradingView From one side, traders are relieved that Ether is trading up 35.5% year-to-date, but the repeated corrections that follow retests of the $1,680 resistance may have weakened investors ' sentiment. Negative newsflow might have limited Ether investors' appetite after troubled cryptocurrency company Digital Currency Group (DCG) faced more legal issues this week. On Jan. 23, a group of Genesis Capital creditors filed a lawsuit alleging violations of federal securities laws. In addition, the plaintiffs allege the lending firm made false and misleading statements thr...