An analyst claims that options are ‘the next rational step’ for Bitcoin exchange-traded fund trading and might start by the end of next month. On January 19, the U.S. Securities and Exchange Commission (SEC) allowed Nasdaq and the Chicago Board Options Exchange (Cboe) to start options trading on Bitcoin (BTC) exchange-traded funds (ETFs).
Nasdaq applied for a regulation change to list and trade options on the iShares Bitcoin Trust. On the other hand, the Chicago Board Options Exchange applied to trade options on exchange-traded products that hold Bitcoin.
Bitcoin ETF Goes Live on Cboe and Nasdaq
It unveiled six out of ten Bitcoin exchange-traded funds lately sanctioned by the Securities and Exchange Commission. Bitcoin exchange-traded funds started trading on the Chicago Board Options Exchange and the Nasdaq on January 11, following ratification from the Securities and Exchange Commission on January 10.
On January 18, Catherine Clay, Cboe vice president, noted that the exchange witnessed ‘excellent inflows’ into the Bitcoin exchange-traded funds, which kept monitoring Bitcoin’s price ‘as anticipated.’
Further, she referred to the options as ‘the next rational step on the Bitcoin exchange-traded funds.’ According to her, Bitcoin exchange-traded fund options trading would increase utility and risk mitigations to the products.
In its filing, Nasdaq claimed that options would provide ‘cost efficacies as well as boosted hedging tactics.’Options refer to a derivative that permits a holder to purchase or sell an asset at a predetermined cost and prearranged time.
Advantage of Spot Bitcoin ETF
On January 17, Dave Nadig, a VettaFi analyst, said that people might begin seeing all kinds of hedge fund players in the Bitcoin exchange-traded fund options. Those who might not have been conventionally gambling on crypto directly in the crypto ecosystem will now get something to play with.
The optimistic view of spot Bitcoin ETFs is under threat from Grayscale Bitcoin Trust (GBTC) investors likely to cash and take profits. Such incident would result in huge outflow capable of imposing downward pressure on crypto prices. Its occurrence would momentarily erode the spot Bitcoin ETFs advantages.
According to Catherine, the Chicago Board Options Exchange filed for consent to list options. She also said they are in this holding trend to establish how regulators will use their revenue and other exchanges’ filings.
It is pretty hard to know whether an approval will happen. James Seyffart, an ETF analyst, explained the Nasdaq announcement’s uncommon swiftness. He said there is a possibility of options trading approval happening before the end of next month or around September 21.
The proposals will stay open for comment for three weeks after publication in the Federal Register.
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