In a groundbreaking move, both Nasdaq and Cboe have taken significant steps to broaden the horizon of cryptocurrency investments. The two giants recently submitted 19b-4 filings to the Securities and Exchange Commission (SEC), seeking approval to trade options on Bitcoin exchange-traded funds (ETFs). The SEC, acknowledging these proposals on January 19, has paved the way for a potential transformation in the crypto investment landscape.
Nasdaq’s ambitious filing specifically targets options trading for BlackRock’s iShares Bitcoin Trust. Simultaneously, Cboe is seeking permission to trade options on “ETPs that Hold Bitcoin.” This strategic move follows the recent green light given to Bitcoin ETFs on both Nasdaq and Cboe, ushering in a new era of possibilities that has captured the attention of keen investors since its initiation on January 11.
Catherine Clay, the Executive Vice President at Cboe, exudes optimism regarding the potential for Bitcoin ETF options trading. She envisions these options adding utility and risk mitigation to cryptocurrency products, considering them the “next logical step” for BTC ETFs. Nasdaq, in its filing, underscores the potential of options to provide “cost efficiencies and increased hedging strategies.”
Analyst Dave Nadig from VettaFi foresees a surge in interest from hedge funds entering the Bitcoin ETF options space, signaling a broader participation of traditional financial players in the ever-evolving crypto ecosystem.
Notably, the options clearing corporation of Cboe has also submitted similar filings with the SEC and the Commodity Futures Trading Commission, reflecting the industry’s commitment to embracing innovative financial instruments.
Bloomberg ETF analyst James Seyffart observes the remarkable speed of Nasdaq’s announcement and speculates that options trading approval could potentially materialize before the end of February or around September 21 at the latest. While the SEC traditionally takes time to respond to such requests, Seyffart anticipates a swifter decision this time around.
Following the proposed rule changes, the SEC has opened a 21-day window for public comments and feedback. Industry experts, including Seyffart, express optimism that the SEC could reach a decision on these filings by the end of February. However, a final verdict may also be delayed until September, highlighting the intricacies of regulatory processes.
This move towards approving Bitcoin ETF options comes on the heels of the SEC’s recent green light for 11 spot Bitcoin exchange-traded funds. Among them are renowned entities such as Grayscale Bitcoin Trust, Bitwise Bitcoin ETF, Hashdex Bitcoin ETF, iShares Bitcoin Trust, and the Valkyrie Bitcoin Fund. Analysts predict that these approvals will not only bring stability to Bitcoin prices but could also contribute to a reduction in liquidity risks over time. This trend signifies the growing acceptance of cryptocurrency within traditional financial markets.
