• SEC approves Nasdaq and Cboe proposals for trading options on Bitcoin exchange-traded funds (ETFs).
  • Nasdaq requested a rule change to trade options on BlackRock's iShares Bitcoin Trust.
  • Analysts anticipate participation from traditional hedge fund players in BTC ETF options trading.

On January 19, the United States Securities and Exchange Commission (SEC) approved proposals from Nasdaq and Cboe to trade options on Bitcoin exchange-traded funds (ETFs). 

Nasdaq requested a rule change to list and trade options on BlackRock's iShares Bitcoin Trust, while Cboe applied to trade options on exchange-traded products (ETPs) that hold Bitcoin. Cboe has already launched six out of the ten BTC ETFs approved by the SEC. 

BTC ETFs started trading on Nasdaq and Cboe on January 11, following SEC approval. Catherine Clay, the executive vice president of Cboe, mentioned that the exchange has been experiencing positive inflows into the BTC ETFs, which have been tracking the price of BTC as expected. 

Both Nasdaq and Cboe believe that options trading will bring cost efficiencies, increased hedging strategies, and risk mitigation to the BTC ETFs. Analysts predict that hedge fund players who were not traditionally involved in the crypto ecosystem will now have the opportunity to participate in BTC ETF options trading. 

James Seyffart, an ETF analyst at Bloomberg, mentioned the surprisingly quick announcement by Nasdaq. Approval for options trading could likely be granted before the end of February, and at the latest, around September 21. 

Once published in the Federal Register, the proposals will be open for public comment for 21 days.


Edited by Shruti Thapa