The U.S. Securities and Exchange Commission (SEC) has given the green light for Bitcoin (BTC) options exchange-traded funds (ETFs) to be listed on two major US exchanges. This approval comes after the regulatory agency announced that it is approving bids from the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE) to list options contracts for BTC-based ETFs.
The SEC cited the recent approval of a rule change proposal from Nasdaq to list options on the iShares Bitcoin Trust (IBIT) as a key factor in approving the ETFs. This move follows positive results from Nasdaq’s approval, signaling a shift towards more options for investors in the cryptocurrency market.
In a statement, the SEC explained, “The Exchange notes that this is a competitive filing as the Commission recently approved a rule proposal by Nasdaq to allow the listing and trading of options on iShares Bitcoin Trust, which is a trust that holds Bitcoin. As discussed herein, the Exchange believes, like the recently-approved options on IBIT, options on the Bitcoin Funds would permit hedging, and allow for more liquidity, better price efficiency, and less volatility with respect to the underlying funds. Further, permitting the listing of such options would enhance the transparency and efficiency of markets in these and correlated products.”
Jeff Park, head of alpha strategies at Bitwise, commented on the potential impact of the SEC approval, stating that “things will likely get wild” in the market. He highlighted the unique nature of Bitcoin as a supply-constrained commodity, emphasizing the potential for regulated leverage in the options ETF market. Park added, “In summary, the Bitcoin ETF options market is the first time the financial world will see regulated leverage on a perpetual commodity that is truly supply-constrained. Things will likely get wild. In such scenarios, regulated markets may shut down. But the remarkable thing about Bitcoin is there will always be a parallel, decentralized market that can’t be shut down, unlike GME (GameStop), which, as you can imagine, will add even more fuel to the fire. It’s going to be unbelievably fantastic.”
With the SEC’s approval paving the way for Bitcoin options ETFs on major US exchanges, investors can expect increased opportunities for hedging, liquidity, and price efficiency in the cryptocurrency market. The move signals a growing acceptance of digital assets in traditional financial markets, opening up new possibilities for investors seeking exposure to the burgeoning cryptocurrency industry.