On October 18, the US Securities and Exchange Commission (SEC) approved a modification that permits the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE) to facilitate options trading for multiple spot Bitcoin exchange-traded funds (ETFs).
This decision arrives amid a surge in weekly inflows for Bitcoin ETFs, marking their strongest performance in nearly seven months.
SEC Approves Options Trading
The SEC’s documents indicated that both exchanges were permitted to list options for spot ETF products. However, while the NYSE received full approval for all offerings, CBOE’s list does not include Grayscale’s Bitcoin Mini Trust.
“The Commission determines that the proposed rule change aligns with Section 6(b)(5) of the Act, which mandates that an exchange establish rules that prevent fraudulent and manipulatory acts and practices, remove barriers to, and enhance the operation of a free and open market, and protect investors and the public interest,” the SEC noted in both filings.
Read more: A Beginner’s Guide to Crypto Options Trading
The precise launch date for these options remains unconfirmed. Nevertheless, ETF experts anticipate that this approval will expand access to cryptocurrency-related financial products on prominent US exchanges. This initiative is expected to boost liquidity surrounding Bitcoin ETFs, attract more participants to the market, and ultimately fortify the industry.
Jeff Park, head of alpha strategies at Bitwise, underscored the benefits of ETF options compared to current BTC options on platforms like Deribit. He highlighted that ETF options provide cross-margining, facilitating integration with various assets such as GLD.
Park clarified that derivatives do not directly impact Bitcoin’s supply but enable USD holders to hedge against Bitcoin exposure, helping to reduce volatility. He also pointed out that ETF options can significantly influence the market conditions for major assets like BTC.
“ETF options act as the tightropes that accelerate flows converting Bitcoin’s potential energy into kinetic energy, all leading in one direction: upwards,” Park concluded.
The SEC’s endorsement coincides with a noteworthy week of inflows for ETFs. Data from SoSoValue indicate that Bitcoin ETFs collectively attracted over $2 billion, extending their winning streak to six days. As a result, the ETFs have achieved a total of $21 billion in net inflows, propelled by strong investor interest.
Read more: How To Trade a Bitcoin ETF: A Comprehensive Guide
Nate Geraci, president of the ETF Store, believes this continuing momentum signifies robust interest from both retail and institutional investors in Bitcoin ETFs. Given the current pace, he forecasts that BTC ETFs could exceed Gold ETFs in market capitalization within the next two years.
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