Bitcoin ETF liquidity expected to rise after SEC options approval

The U.S. Securities and Exchange Commission (SEC) recently approved options trading for spot Bitcoin (CRYPTO:BTC) exchange-traded funds (ETFs), a move expected to significantly boost liquidity.

This approval allows 11 Bitcoin ETF providers, listed on the New York Stock Exchange (NYSE) and Chicago Board Options Exchange (CBOE), to offer options trading.

According to QCP Capital, this approval is set to attract sustainable inflows into Bitcoin ETFs, as institutional demand remains strong.

QCP Capital noted in an Oct. 19 report, “The SEC's approval for BTC ETF options trading will provide the ETF with the needed liquidity to attract sustainable inflows."

ETFs have been a key driver of Bitcoin's price growth, with around 75% of new investment coming from them earlier this year.

The upcoming U.S. presidential election in 2024 is also anticipated to drive risk-on sentiment, potentially fueling more inflows into Bitcoin and other cryptocurrencies.

QCP Capital suggested that as investor appetite for risk grows, it will support Bitcoin's price movements and align with the narrative of a bullish October.

To confirm a breakout, Bitcoin needs a weekly close above $68,700.

Popular crypto analyst Rekt Capital pointed out, “A weekly close just like this would be bullish,” indicating that such a close would signal a breakout beyond key resistance levels.

With Bitcoin ETF inflows surpassing $20 billion in total net flows by mid-October—an achievement that took Gold-based ETFs nearly five years—Bitcoin ETFs continue to demonstrate strong momentum.

If these inflows persist, Bitcoin could be on track for further price gains, especially as institutional interest continues to build.

At the time of writing, the Bitcoin (BTC) price was $68,117.46.