SEC approves Bitcoin-ETF options for NYSE and CBOE
The US SEC gave the official green light to listing and trading options on Bitcoin ETFs on the NYSE and the CBOE. Coming on October 18, this is an accelerated approval that gives the traditional and crypto investors the possibility of new ways of managing their risks or reaping profits in this ever-expanding cryptocurrency market.
What are the options of Bitcoin ETFs?
Options on ETFs give the investor the right, but not the obligation to exercise, the Bitcoin ETF at a predetermined price within a set time. The options come in “call” options, which give an investor the right to buy, and “put” options, which give them the right to sell. This setup will enable investors to hedge positions, speculate on movements of prices, and manage risk in a volatile market like Bitcoin.
It would appear that the SEC considers options on Bitcoin ETFs as a further improvement of market efficiency, adding to less volatility in the Bitcoin ETF market segment. “Better price efficiency” and “less volatility” for underlying Bitcoin ETFs could have a wider positive impact on the stabilization of the general cryptocurrency market were some of the reasons behind the regulator’s green light.
List of Approved Bitcoin ETFs for Options Trading
Now that the SEC has given the green light, options trading will become valid on NYSE for 11 Bitcoin ETF providers. The list of such ETFs now includes:
- Fidelity Wise Origin Bitcoin Fund
- ARK21Shares Bitcoin ETF
- Invesco Galaxy Bitcoin ETF
- Franklin Bitcoin ETF
- VanEck Bitcoin Trust
- WisdomTree’s Bitcoin Fund
- Grayscale Bitcoin Trust
- Grayscale Bitcoin Mini Trust
- Bitwise Bitcoin ETF
- BlackRock’s iShares Bitcoin Trust ETF
- Valkyrie Bitcoin Fund
Market Reactions and Implications
Permission for options on Bitcoin ETFs might prove a turning point toward more fluidity in Bitcoin markets. Jeff Park, head of alpha strategies at Bitwise Invest, termed the SEC’s move “game-changing” for crypto markets. This may lead to a thick market, they say, if it results in more participation by Wall Street in Bitcoin trading.
Options on Ethereum ETFs: Decision Delayed
While approval has been given for Bitcoin ETF options, the SEC has delayed the options trading linked to spot Ethereum ETFs. That decision was expected by the end of September but has now been shifted to mid-November, leaving Ethereum investors in hot anticipation for what happens afterward.
