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Bitcoin Options in Play! SEC Opens Door to Spot ETF Derivatives

Bitcoin Options in Play! SEC Opens Door to Spot ETF Derivatives

The SEC seeks public input on Bitcoin spot ETF options trading. The financial world buzzes, with experts predicting approval by March. This potential green light could significantly impact the cryptocurrency landscape.

Bitwise and Grayscale File Bitcoin Spot ETF Options With the NYSE

The New York Stock Exchange (NYSE) applied a rule change on Friday with the SEC that will allow options trading on Bitwise Bitcoin ETF (BITC), Grayscale Bitcoin Trust (GBTC), and “any trust that holds Bitcoin.” NYSE declares Bitcoin spot ETFs, as commodity-backed ETPs, eligible for options trading under US regulations. This opens the door for derivative products based on Bitcoin, potentially increasing investment opportunities and market liquidity.

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Nasdaq requested permission to list and trade options on BlackRock’s billion-dollar spot ETF IBIT from the US Securities Watchdog earlier this month, as reported by Bitcoinist. 

In perspective, options are financial derivatives that grant the holder the option—but not the duty—to purchase or sell an underlying asset at a fixed price (the strike price) before or on the option’s expiration date. This Bitcoin spot ETF focuses on direct asset exposure, but options trading offers a twist: a lower-cost alternative. Traders can gain exposure to these funds without directly buying them, making it an attractive tool for cost-conscious investors.

NYSE sets strict rules for Bitcoin spot ETF options. Listing, trading, and everything in between – from expiration dates to exercise limits – will follow standard exchange regulations. The options must also meet NYSE’s ongoing listing requirements, or face delisting if the underlying ETF fails to comply with specific US securities laws.

Analyst Projects Potential Early Approval Of Trading In Bitcoin ETF Options 

As previously stated, the SEC formally acknowledged NYSE’s most recent filing, adding the proposal to its official register and requesting public comments for the following twenty-one days. After this significant development, Bloomberg analyst James Seyffart suggests addressing this issue more urgently.

In that scenario, Seyffart projects that within the next 27 days, the US regulatory agency may approve the trading of Bitcoin spot ETF options. The Bloomberg analyst estimates that, in the worst-case scenario, an approval decision could be made by September 21 if the SEC takes its time. 

Bitcoin Spot ETF options
Bitcoin trading at $50,820 on the daily chart | Source: BTCUSDT chart on Tradingview.com

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