Key Takeaways
- Decision applies to fidelity Wise Origin Bitcoin Fund, ARK21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, Franklin Bitcoin ETF, and VanEck Bitcoin Trust.
- SEC stated that these options products align with regulatory requirements designed to prevent fraud and protect investors.
The U.S. Securities and Exchange Commission (SEC) has granted approval for the listing and trading of options on spot Bitcoin exchange-traded funds (ETFs) through both the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE).
This significant decision applies to several major Bitcoin ETFs, including the Fidelity Wise Origin Bitcoin Fund, ARK21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, Franklin Bitcoin ETF, and VanEck Bitcoin Trust, Grayscale Bitcoin Trust, WisdomTree Bitcoin Fund, and Bitwise Bitcoin ETF. These ETFs, previously approved for spot trading, will now see options trading, providing investors with more flexibility and potential hedging strategies.
Options trading in crypto refers to a type of derivatives trading that allows investors to buy or sell the right (but not the obligation) to purchase or sell a crypto at a predetermined price within a specific time frame
In its official filing, the SEC stated that these options products align with regulatory requirements designed to prevent fraud, ensure a free and open market, and protect investors. “This rule change is consistent with the Exchange Act, which requires rules that prevent manipulative acts, remove market barriers, and safeguard public interest,” the SEC noted.
This new approval follows an earlier decision allowing options on the iShares Bitcoin Trust, which was approved for trading on the Nasdaq exchange. By enabling options trading, the SEC aims to increase liquidity in the Bitcoin market, making it easier for investors to buy and sell Bitcoin-linked financial products.
Market participants believe this development will likely increase institutional interest in Bitcoin, as options allow for more sophisticated trading strategies. The growing institutional appetite for Bitcoin ETFs has been evident in recent weeks, with more than $2.1 billion in inflows over the past five trading days.
