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Apply for Bitcoin ETF options trading
The U.S. Securities and Exchange Commission (SEC) announced on the 19th that Nasdaq and Cboe have applied for options trading on Bitcoin (BTC) ETFs (Exchange Traded Funds).
The U.S. stock exchange, Nasdaq, is seeking rule changes for BlackRock’s Ishares Bitcoin Trust (IBIT) to allow options to be listed and traded. Nasdaq explains in its SEC filing:
Offering options on BlackRock’s IBIT provides another low-cost investment vehicle for gaining exposure to physical Bitcoin.
We also believe that investors will benefit by providing Bitcoin products and a means of hedging their Bitcoin positions.
This suggests that the introduction of options will further strengthen the risk management capabilities of Bitcoin ETFs.
An option is a type of derivative financial product that gives its holder the right to buy or sell an asset at a set price at a certain point in the future. It may be used as a hedge against changes in the price of an asset.
U.S. stock exchange Cboe is seeking permission from the SEC for Cboe to list and trade options on “exchange-traded products that hold Bitcoin.”
Cboe Executive Vice President Kathryn Clay said options trading is the “next logical step” in the evolution of Bitcoin ETFs, providing additional convenience and risk mitigation for investors.
What is Bitcoin ETF?
An Exchange Traded Fund that includes Bitcoin as an investment. An investment trust is a financial product that collects money from investors into a single fund and invests it in stocks, bonds, etc. The system is such that the investment results are distributed according to each investor’s investment amount. Among investment trusts, ETFs are listed on stock exchanges, so they can be bought and sold like stocks.
Virtual currency glossary
connection:
Learn about Bitcoin ETFs from the beginning: Explaining the advantages and disadvantages of investing and how to buy US stocks
Prediction of approval time
Bloomberg analyst James Seifert commented on Nasdaq and Cboe’s filings:
The SEC has already acknowledged the 19b-4’s requesting the ability to trade options on spot #Bitcoin ETFs. This is faster than SEC typically moves. Options could be approved before end of February if SEC wants to move fast?…
AT ABSOLUTE EARLIEST options still ~27+ days away pic.twitter.com/ohbvHgP2uO
— James Seyffart (@JSeyff) January 19, 2024
The SEC has officially approved these applications to include options in physical Bitcoin ETFs. This is a faster pace than usual.If the SEC acts quickly, the option could be approved by the end of February.
Mr. Seifert predicted that the earliest a decision could be made would be at least 27 days away, and in the latest case, around September 21.
Currently, Nasdaq et al.’s application for option handling is subject to a 21-day public comment period.
Eric Balciunas, another Bloomberg analyst, gave an update on the 20th on the performance of nine Bitcoin spot ETFs that have been launched.
The ‘Nine’ saw another jump in volume today, up 12% vs Thur and 53% from Wed, a rare phenomenon. Also check out $FBTC seeing more trading than $IBITthose two are in a legit duel to be The One.. but all of them posting huge numbers for newbies, competition is making them all… pic.twitter.com/H2zhz2mEMz
— Eric Balchunas (@EricBalchunas) January 19, 2024
He pointed out that the transaction volume increased again on the 6th day of release, which is unusual. He also said that Fidelity’s FBTC and BlackRock’s IBIT are competing for top trading volume.
As for the trading volume up to the 6th day, IBIT was approximately 409 billion yen (approximately $2.76 billion), followed by FBTC at approximately 318 billion yen (approximately $2.15 billion).
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