Key Takeaways
- Cboe filing seeks permission to trade options on “ETPs that Hold Bitcoin.”
- Nasdaq’s filing aims to list and trade options on BlackRock’s iShares Bitcoin Trust,
Nasdaq and Cboe have submitted 19b-4 filings with the Securities and Exchange Commission (SEC) to amend listing rules, seeking approval to trade options on Bitcoin exchange-traded funds (ETFs). The SEC acknowledged these proposals on January 19, marking a significant step toward expanding the cryptocurrency investment landscape.
Nasdaq’s filing aims to list and trade options on BlackRock’s iShares Bitcoin Trust, while Cboe seeks permission to trade options on “ETPs that Hold Bitcoin.” This move follows the recent approval of Bitcoin ETFs on both Nasdaq and Cboe, which began trading on January 11, drawing positive attention from investors.
Cboe executive vice president, Catherine Clay, expressed optimism about the potential for Bitcoin ETF options trading, stating that it would add utility and risk mitigation to these products. Options, a derivative allowing the holder to buy or sell an asset at a predetermined price and time, are seen as the “next logical step” for BTC ETFs. Nasdaq highlighted in its filing that options could provide “cost efficiencies and increased hedging strategies.”
VettaFi analyst Dave Nadig anticipates a surge in interest from hedge funds in the Bitcoin ETF options space, expanding the participation of traditional financial players in the crypto ecosystem.
The options clearing corporation of Cboe has also submitted similar filings with the SEC and the Commodity Futures Trading Commission.
Bloomberg ETF analyst James Seyffart noted the remarkable speed of Nasdaq’s announcement, speculating that options trading approval could potentially arrive before the end of February or by around September 21 at the latest. The SEC typically takes time to respond to such requests, but Seyffart suggests a quicker decision this time.
Following the proposed rule changes, the SEC has opened a 21-day window for public comments and feedback. Industry experts, including Seyffart, believe the SEC could reach a decision on these filings by the end of February, although a verdict may also be delayed until September.
The move towards approving Bitcoin ETF options comes in the wake of the SEC’s green light for 11 spot Bitcoin exchange-traded funds, including Grayscale Bitcoin Trust, Bitwise Bitcoin ETF, Hashdex Bitcoin ETF, iShares Bitcoin Trust, and the Valkyrie Bitcoin Fund. Analysts predict that these approvals will bring more stability to Bitcoin prices in the long term and could potentially reduce liquidity risks over time, signaling growing acceptance of cryptocurrency in traditional financial markets.
