UBS has blown up the market: exposure to call options on bitcoin ETFs has grown 24-fold.
Swiss banking giant UBS is demonstrating an unprecedented appetite for bitcoin assets, radically revising its strategy during the second quarter of 2024. According to my analysis of fresh SEC data, as of June 30, the bank held call options on 1.95 million shares of BlackRock's bitcoin ETF IBIT — a staggering jump from 80,000 shares the previous quarter, representing a 24-fold increase.
This dynamic signals a shift in sentiment among institutional players: UBS is no longer just hedging risks but is betting on an upward trend for the leading cryptocurrency. Notably, the bank's direct position in IBIT grew by only 12% — to 407,890 shares, equivalent to roughly $13.6 million. However, derivatives have become the primary tool for expressing a bullish outlook.
Even more telling is the 53% reduction in put options, down to 143,300 shares. This signals that UBS is deliberately scaling back protective mechanisms, anticipating further price growth of the underlying asset. Such a configuration — where calls surge sharply while puts contract — is a classic sign of confidence in a sustained upward momentum.
Interestingly, the choice fell on BlackRock's IBIT, which remains the most liquid and largest bitcoin ETF on the market. For a conservative institution like UBS, this is a logical step: market depth and issuer reliability minimize operational risks.
My conclusion: UBS's actions are not just a one-off trade but confirmation of a trend among major banks that are beginning to view bitcoin as an institutional asset class. The 24-fold growth in call options alongside a simultaneous reduction in puts indicates that professional players are factoring further all-time highs into their models. If other banks replicate this dynamic in upcoming reports, we could see a new wave of institutional demand capable of significantly impacting the supply-demand balance in the market.