The US Securities and Exchange Commission (SEC) gave the green light to the New York Stock Exchange. The Stock Exchange (NYSE) and the Chicago Board Options Exchange (Cboe) will list options trading on several spot Bitcoin ETFs. This development comes amid heavy inflows recorded by these Bitcoin ETFs over the past week.
NYSE and CBOE Secure Expedited Approval for Spot Bitcoin ETF Options Trading
The NYSE and Cboe have received permission to list and trade options on multiple spot Bitcoin ETFs, according to SEC filings.
Under the NYSE's proposed rule changes, U.S. securities regulators will require the exchange to sell the Grayscale Bitcoin Trust (GBTC), the Grayscale Bitcoin Mini Trust BTC (BTC), and the Bitwise Bitcoin ETF. (BITB) has been authorized to offer options trading. Meanwhile, Cboe has given the green light to list and trade options on the Fidelity Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF (ARKB).
Interestingly, both exchanges received “early approval” from the commission. This means that approval was granted prior to the regular 30-day public comment period for proposed amendments pursuant to Section 19(b)(2) of the Securities Exchange Act of 1934.
However, accelerated approval typically occurs when the Commission determines that the public's protection of market stability does not require a full 30-day wait, or when there is a good reason to expedite the process, as in the case of the NYSE and Cboe. done in some cases.
Commenting on this development, Bloomberg analyst Eric Bartsumas praised the SEC's decision but expressed that he was not surprised. Balchunas said:
They recently approved the same thing on Nasdaq, so it wasn't a huge surprise, but it was still good news since the SEC was a big hurdle. We've heard good reports about the rest of the process, but the exact timeline for the listing date is still unclear.
Prior to the NYSE and Cboe, the SEC approved Nasdaq to list and trade options on the BlackRock iShares Bitcoin Trust (IBIT). This is the first approval for spot Bitcoin ETF options trading and comes nine months after filing with the SEC.
What opportunities does options trading bring to Bitcoin ETFs?
Options trading refers to a buy-sell contract that gives a trader the right to buy or sell an asset, such as an ETF, at a predetermined price, even within a specific time frame. Six of the Bitcoin ETF's active spots will be subject to options trading, exposing these institutional investors to new trading strategies that hedge against volatility and take advantage of overnight Bitcoin price movements.
Bitwise executive Jeff Park sheds more light on these with what he calls “free leverage.” Mr. Park said:
ETF options offer cross-margining capabilities on multi-asset portfolios that single-asset exchanges like Davit can never offer. Only spot ETF options can leverage GLD, SPY, HYG ETFs, bonds, and cross-margin to achieve the closest unknown capital efficiency to free leverage.
Ultimately, this will increase institutional investor interest in the already booming spot Bitcoin ETF market, which has over $65 billion in net assets after 10 months of trading.
Featured image from Forbes, chart from Tradingview
