US SEC Greenlights NYSE Options Trading for Spot Bitcoin ETFs

The U.S. Securities and Exchange Commission (SEC) has granted accelerated approval for the listing and trading of options tied to spot Bitcoin exchange-traded funds (ETFs) on the New York Stock Exchange (NYSE) and the Cboe Exchange. This decision follows a significant rise in interest in Bitcoin ETFs and offers traders an alternative way to gain exposure to Bitcoin through options contracts.

SEC Greenlights NYSE & Cboe Options Trading For Spot Bitcoin ETFs

According to a filing on Friday, the SEC has authorized the NYSE and Cboe to list and trade options on a number of spot Bitcoin ETFs. Among the funds receiving approval are the Fidelity Wise Origin Bitcoin Fund, ARK21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, Grayscale Bitcoin Trust, and iShares Bitcoin Trust ETF, among others. 

These ETFs were initially approved by the SEC in January, marking a significant moment for the broader cryptocurrency market.

The approval will allow institutional investors and traders to hedge their positions in BTC or amplify their exposure to its price movements through options contracts. Options are derivatives that provide the right, but not the obligation, to buy or sell an asset at a set price before a specified date.

Institutional Interest in Bitcoin ETFs Continues to Grow

The approval comes amid growing institutional interest in Bitcoin ETFs, with net inflows of more than $2.1 billion in the past five trading days. The move is seen as a further step in making Bitcoin more accessible to institutional and retail investors, especially as large asset managers such as BlackRock and Fidelity continue to offer cryptocurrency products. 

In September, the Securities and Exchange Commission approved similar options contracts for the iShares Bitcoin Trust on Nasdaq, indicating that the regulator is becoming more comfortable with financial products tied to Bitcoin.

The ability to trade options on BTC ETFs provides investors with new strategies to manage risk and gain exposure to Bitcoin. Eric Balchunas, senior ETF analyst at Bloomberg, stated,

“The SEC’s approval was expected, especially after the Nasdaq approval in September, but it’s still positive news for the market.”

NYSE and Cboe Prepare for Increased Bitcoin Trading

Both NYSE and Cboe have been preparing for the potential surge in trading following the SEC’s approval. NYSE filed for options listing on Bitcoin ETFs in August, with Cboe following closely. This accelerated approval by the US SEC is seen as a sign that the regulatory body is trying to accommodate growing market demand for Bitcoin-related financial products.

The Securities and Exchange Commission emphasized that this rule change is consistent with the requirements set forth in Section 6(b)(5) of the Securities Exchange Act, which aims to prevent fraudulent practices and ensure fair markets. By allowing options trading on Bitcoin ETFs, the US SEC hopes to “remove impediments to and perfect the mechanism of a free and open market” while safeguarding the interests of investors.

This development opens up new opportunities for market participants looking for more efficient ways to invest in Bitcoin. Options contracts offer a flexible and cost-effective approach to gaining exposure to BTC, as traders can execute strategies without having to buy or sell the cryptocurrency directly. Additionally, the approval of these products provides a regulated environment for trading Bitcoin derivatives, further integrating cryptocurrency into the mainstream financial system.

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

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