The U.S. Securities and Exchange Commission (SEC) has approved Bitcoin (BTC) options exchange-traded funds (ETFs) for two major US exchanges.
The regulatory agency has given the green light to the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE) to list options contracts for BTC-based ETFs, according to separate statements.
The SEC stated that the approval for the options ETFs was influenced by a recent rule change proposal approval from Nasdaq to list options on the iShares Bitcoin Trust (IBIT), which had positive outcomes.
“The Exchange notes that this is a competitive filing as the Commission recently approved a rule proposal by Nasdaq to allow the listing and trading of options on iShares Bitcoin Trust, which is a trust that holds Bitcoin.
As discussed herein, the Exchange believes, like the recently-approved options on IBIT, options on the Bitcoin Funds would permit hedging, and allow for more liquidity, better price efficiency, and less volatility with respect to the underlying funds.
Further, permitting the listing of such options would enhance the transparency and efficiency of markets in these and correlated products.”
In September, Jeff Park, head of alpha strategies at Bitwise, commented that “things will likely get wild” following the SEC’s approval of Nasdaq’s bid to list BlackRock’s IBIT options.
Park mentioned that since BTC cannot be diluted by creating more, the outlook for options ETFs will be “unbelievably fantastic.”
“In summary, the Bitcoin ETF options market is the first time the financial world will see regulated leverage on a perpetual commodity that is truly supply-constrained.
Things will likely get wild. In such scenarios, regulated markets may shut down. But the remarkable thing about Bitcoin is there will always be a parallel, decentralized market that can’t be shut down, unlike GME (GameStop), which, as you can imagine, will add even more fuel to the fire. It’s going to be unbelievably fantastic.”
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