| When traders load up on derivatives, it can often be hard to know if they are preparing for good or bad news. Take what happened last Friday, when open interest in Bitcoin futures hit an all-time high at CME Group — and exceeded the amount at crypto-market leader Binance. Many took that as a sign that investors expect the Securities and Exchange Commission to approve an exchange-traded fund investing directly into Bitcoin soon. But futures and options can be used to go short or long. And some traders are, in fact, piling into the futures because they worry the ETF could get rejected by the SEC, says Giovanni Vicioso, global head of cryptocurrency products at CME. "I think it's uncertain what's going to happen, market participants need proper tools to hedge against that risk," he told Bloomberg. Optimism about a spot Bitcoin ETF's approval has been growing ever since the world's biggest asset manager, BlackRock, filed its application for one over the summer. Other heavyweights of traditional finance, such as Fidelity, followed with similar filings. Adding fuel to the fire, digital-asset manager Grayscale recently won an important legal case, with the SEC now required to reconsider its application to convert its Bitcoin trust into a spot Bitcoin ETF. As optimism about an ETF's approval surged, Bitcoin's price has more than doubled this year. CME's Bitcoin futures trading volume jumped about 13% in November from October, when it was 35% higher than in September, Vicioso said. More institutions are once again dabbling in crypto: CME's average large Bitcoin open-interest holders, with at least 25 contracts, hit an all-time high the week of Nov. 7. "That's a clear indication that institutions are moving into this space," he said. But they all are not betting that the spot Bitcoin ETF gets approved; some are also betting against. What many forget is that the SEC has rejected a number of spot Bitcoin ETFs over the years, citing issues such as the market's susceptibility to manipulation. Those same concerns exist today, though the SEC may need to find other reasons for a rejection. Many other crypto exchanges offer perpetual Bitcoin futures, which effectively never expire. But traders are piling into CME's offerings specifically because its Bitcoin contracts expire on a particular date. So they can use them to hedge against a suspected ETF approval deadline, or against price changes that might come with Bitcoin's halving, expected next spring (when the rewards given to Bitcoin miners will be cut in half.) With uncertainty abounding, CME will soon let traders target particular crypto dates with even greater precision through an enhanced listing schedule for weekly Bitcoin options and Micro Bitcoin options, the company said. Monday-to-Friday weekly Bitcoin and Micro Bitcoin options have now been added on a one-time basis for contracts expiring from Jan. 2 to Jan. 31, 2024, and from April 1 to April 30, 2024. Optimism about an imminent ETF approval has been Bitcoin's leading plotline all year. But in volatile crypto, nothing is a sure bet. | 
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