Investors can now hedge their bitcoin exposure through the trading of Bitcoin ETF options.

• The Nasdaq began trading options on BlackRock's popular iShares Bitcoin Trust ETF (IBIT) on Tuesday.
• In the first 60 minutes of trading on Tuesday, IBIT traded 73,000 options contracts, placing the fund among the top 20 most active non-index options on Nasdaq, according to CNBC.
• Options trading allows investors to play bitcoin's notorious volatility.

The iShares Bitcoin Trust ETF (IBIT) began trading on the Nasdaq on Tuesday, introducing a new way to invest in and speculate on the value of bitcoin.

In the first 60 minutes of trading on Tuesday, IBIT traded 73,000 options contracts, placing the fund among the top 20 most active non-index options on Nasdaq, according to CNBC.

Options trading enables investors to capitalize on notorious volatility by allowing them to purchase or sell an asset at a predetermined price based on their prediction of the price's direction in a specific time frame.

"Noelle Acheson, an economist and author of the "Crypto is Macro Now" newsletter, stated that while Bitcoin has a lively derivatives market, it is still small in the U.S. compared to other asset classes and is mainly limited to institutional players. She believes that a deeper onshore derivatives market will enhance the growing market sophistication, which will reinforce investor confidence in the asset, bring in new cohorts, and enable a greater variety of investment and trading strategies. This, in turn, should dampen both volatility and downside, all else being equal."

Options contracts on major ETFs are highly sought after by experienced traders, as evidenced by the fact that Interactive Brokers clients have placed more options orders on the and the in the past five business days than for the funds themselves, according to the brokerage's data.

The launch of bitcoin ETF options is likely to result in new funds that incorporate those options, according to Todd Sohn, ETF strategist at Strategas.

According to Sohn, Grayscale has already filed a covered call [fund], and it's likely that BlackRock will follow suit. After that, we can expect to see buffers and other trend-following strategies emerge. Sohn believes that the ecosystem will take off as a result.

Bitcoin ETFs were launched in January and have been widely acclaimed as the most successful ETF launches ever.

The Grayscale Bitcoin Trust (GBTC), the Grayscale Bitcoin Mini Trust (BTC), the Bitwise Bitcoin ETF (BITB), the Fidelity Wise Origin Bitcoin Fund (FBTC), and the ARK 21Shares Bitcoin ETF (ARKB) are among the Bitcoin ETFs that are expected to have options available soon. Last month, the Securities and Exchange Commission approved the rule changes filed by the New York Stock Exchange and Cboe Global Markets, which list these ETFs.