Investment managers anticipate that the introduction of options on spot Bitcoin (BTC) exchange-traded funds (ETFs) in the United States will significantly boost institutional interest and may reveal “extraordinary upside” for spot BTC holders.
On September 20, the US Securities and Exchange Commission (SEC) granted approval for Nasdaq’s electronic securities exchange to list options linked to BlackRock’s iShares Bitcoin Trust ETF (IBIT). This landmark decision represents the first instance where the regulator has sanctioned options related to spot BTC for trading within the US.
The ability to list spot BTC options on regulated US exchanges—where the Options Clearing Corporation (OCC) protects traders from counterparty risks—signifies a “monumental advancement” in the cryptocurrency landscape, according to Jeff Park, head of alpha strategies at Bitwise Invest. He highlighted this in a post on X on September 20, stating, “For the first time, Bitcoin will be traded in a regulated market, with the OCC safeguarding clearing members against counterparty risks. This opens the door for Bitcoin’s synthetic notional exposure to expand exponentially without the [default] risks that have previously deterred investors.”
The SEC’s approval of spot BTC ETF options on September 20 is a pivotal moment in the industry. Options are contracts that provide the holder the right to buy (call) or sell (put) an underlying asset at a specified price. In the US, if one party defaults, the OCC steps in to settle the transaction. Spot BTC options enable a range of capital-efficient portfolio strategies for investors and could potentially trigger “explosively recursive” price increases for the limited supply of spot BTC, Park observed.
Furthermore, Tom Dunleavy, a managing partner at the cryptocurrency investment firm MV Global, explained to Cointelegraph that “the emergence of institutional hedging and markets through options mechanisms will fundamentally reduce volatility for the underlying asset over time.”
Before trading can commence, Nasdaq must secure approval from two additional regulatory bodies: the Commodities Futures Trading Commission (CFTC) and the Options Clearing Corporation (OCC). Analysts predict that these approvals will come soon, likely leading to a surge of similar products on other exchanges.
“I expect that other approvals will follow quickly,” stated Eric Balchunas, an ETF analyst at Bloomberg Intelligence, in a post on X on September 20.
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