The U.S. Securities and Exchange Commission (SEC) has provided “early approval” for Bitcoin options exchange-traded funds (ETFs) to be listed on both the New York Stock Exchange (NYSE) and the Chicago Options Exchange (CBOE).
In a filing dated October 18, the SEC confirmed that it has authorized the NYSE and CBOE to start listing and trading options related to Bitcoin ETFs.
Options are financial instruments that give investors the right, but not the obligation, to buy or sell an asset at a predetermined price before a specified date, which can be classified as “call” or “put” options. This development is anticipated to open up new avenues for investors seeking to hedge risks or capitalize on fluctuations in Bitcoin’s price.
According to the NYSE’s announcement, the introduction of options trading could lead to “enhanced price efficiency” and “lower volatility” for the underlying Bitcoin ETFs, potentially contributing to a more stable market environment.
The filing also highlighted that permitting the listing of these options could enhance the market’s transparency and efficiency for these financial products and others connected to them.
The NYSE will facilitate options trading in collaboration with 11 ETF providers, including:
- Fidelity Wise Origin Bitcoin Fund
- ARK 21Shares Bitcoin ETF
- Invesco Galaxy Bitcoin ETF
- Franklin Bitcoin ETF
- VanEck Bitcoin Trust
- WisdomTree Bitcoin Fund
- Grayscale Bitcoin Trust
- Grayscale Bitcoin Mini Trust
- Bitwise Bitcoin ETF
- BlackRock iShares Bitcoin Trust ETF
- Valkyrie Bitcoin Fund
In a similar vein, the SEC has also approved options listings for these ETFs on the CBOE, except for Grayscale’s Bitcoin Mini Trust.
Furthermore, the SEC had previously authorized Nasdaq’s request to list and trade options for BlackRock’s iShares Bitcoin Trust earlier this year in 2024.
Many investors regard the approval of Bitcoin ETF options as a key milestone that could enhance liquidity in the Bitcoin market. Jeff Park, Head of Alpha Strategy at Bitwise Invest, described this move as “transformative” for the cryptocurrency sector.
Other players in the market believe that the engagement of Wall Street may significantly elevate the Bitcoin market once trading commences. See below for more insights.
In contrast, the SEC has decided to delay its consideration of spot Ethereum ETF options trading, which was initially set to conclude by the end of September, pushing the review period to mid-November.
