The US Securities and Exchange Commission (SEC) has approved the rule change to allow two top exchanges to trade options on spot Bitcoin ETF products.
As stated in a filing on Friday, the Wall Street securities watchdog gave accelerated regulatory approval to the New York Stock Exchange (NYSE). Notably, the NYSE, the largest stock exchange by market cap, will trade 11 spot Bitcoin ETF products.
The approved rule change allows the NYSE to offer investors access to options on the iShares Bitcoin Trust (IBIT), Franklin Bitcoin ETF (EZBC), the Grayscale Bitcoin Trust (GBTC), the Grayscale Bitcoin Mini Trust (BTC), among others.
Furthermore, the Chicago Board Options Exchange (CBOE) also received the regulatory node to list options on 10 spot Bitcoin ETFs. The trading platform will list all the spot Bitcoin ETFs except the Grayscale Bitcoin Mini Trust (BTC).
SEC Greenlights Options Trading on Spot Bitcoin ETF Products
Notably, the SEC’s Friday approval came after greenlighting Nasdaq’s filing to trade a similar product. On September 20, the regulator approved Nasdaq’s rule change request to offer options contracts on BlackRock’s IBIT to US investors.
Options trading allows investors to buy and sell shares of the spot Bitcoin ETF products at a predetermined price and within an agreed-upon period. Notably, the SEC noted in the October 18 approval that it believes the options trading for Bitcoin ETFs would allow hedging and provide better liquidity to the funds.
Meanwhile, the spot Bitcoin ETF products have seen massive traction since approval. The funds now have a cumulative net inflow of over $20 billion and hold 4.89% of Bitcoin’s circulating supply less than a year after their market debut.
Market speculators believe that the options contract will attract more institutional investors and consequently boost Bitcoin’s bullish momentum. Notably, the SEC has not approved Nasdaq’s request to trade the Bitcoin options index (XBTX).
Exchanges Hope to Clear Final Hurdle
Following the approval, Bloomberg’s senior analyst Eric Balchunas noted that the move was expected. The market expert stated that it was the same as Nasdaq’s. As a result, the SEC’s approval was no surprise.
They approved same thing for Nasdaq recently so not a big surprise but still good news as SEC was big hurdle. We hearing good things about the rest of process altho exact timeline for listing date still unclear. https://t.co/N9squVSXfS
— Eric Balchunas (@EricBalchunas) October 18, 2024
Furthermore, he revealed that the remaining process before the listing was moving smoothly. It bears mentioning that the SEC approval was not the only process involved in listing the options on the spot Bitcoin ETF products. Other regulators, like the Commodity Futures Trading Commission (CFTC), would have to greenlight the products.
Notably, Balchunas stated they were “hearing good things” about the CFTC approval process. However, he clarified that the exchanges had not received an exact listing date for the options contracts.
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