SEC Approves Bitcoin ETF Options Trading on NYSE and Cboe

TLDR

• SEC approves options trading for spot Bitcoin ETFs on NYSE and Cboe
• NYSE can list options for GBTC, BTC, and BITB
• Cboe can offer options for FBTC and ARKB
• Options expected to attract institutional investors and boost liquidity
• SEC believes this will improve market transparency and efficiency

The U.S. Securities and Exchange Commission (SEC) has given the green light for options trading on spot Bitcoin Exchange-Traded Funds (ETFs) on two major American exchanges.

This decision, announced on October 18, 2024, marks a significant development in the cryptocurrency investment landscape.

The SEC approved filings from both NYSE American LLC and Cboe Exchange, Inc. to list and trade options on various spot Bitcoin ETFs.

NYSE American, a subsidiary of the New York Stock Exchange Group, received approval to list options for the Grayscale Bitcoin Trust (GBTC), Grayscale Bitcoin Mini Trust (BTC), and Bitwise Bitcoin ETF (BITB).

Cboe Exchange, formerly known as the Chicago Board Options Exchange, got the go-ahead to offer options trading on the Fidelity Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF (ARKB).

This move follows a similar approval granted to Nasdaq ISE, LLC on September 20, allowing it to list and trade options on the iShares Bitcoin Trust (IBIT). The recent approvals expand the range of Bitcoin-related investment products available to U.S. investors.

Options are financial tools that give investors the right to buy or sell an asset at a set price within a specific time frame. In this case, the assets are the spot Bitcoin ETFs.

The introduction of options on these ETFs is expected to attract more institutional investors to the cryptocurrency market and increase overall liquidity.

The SEC highlighted several potential benefits of allowing options trading on Bitcoin ETFs. These include supporting hedging strategies, promoting greater liquidity, and improving price accuracy while potentially reducing volatility for the underlying funds.

The regulatory body also believes this development will lead to better market transparency and efficiency for both Bitcoin ETFs and related products.

NYSE American LLC, previously known as the American Stock Exchange (AMEX), focuses on small-cap companies and offers trading in equities, options, and Exchange-Traded Products (ETPs).

The exchange has recently expanded its offerings to include spot Bitcoin ETFs following regulatory approval in January.

Cboe Exchange, Inc. is one of the largest options exchanges globally. It specializes in derivatives trading and operates in various markets worldwide, offering options and equity trading across multiple exchanges.

The approval of options trading for spot Bitcoin ETFs represents another step in the integration of cryptocurrency-based financial products into traditional markets. It provides investors with more tools to manage their Bitcoin-related investments and potentially hedge against market risks.