The United States Securities and Exchange Commission (SEC) has granted Nasdaq approval to list and trade shares of options for BlackRock’s spot Bitcoin exchange-traded fund (ETF), marking a significant step in the crypto space. The iShares Bitcoin Trust, operating under the ticker symbol IBIT, is now set to be listed on the Nasdaq, with the exchange announcing that options trading for this ETF will proceed under the same regulations as other ETFs. This decision comes at a time when the demand for Bitcoin-based financial products is surging.
Details of the SEC’s Approval
In a statement dated 20th September, the SEC confirmed its approval for options trading on IBIT. Nasdaq will allow these options to be traded using American-style exercise, meaning the options can be exercised at any time before expiration, providing flexibility for traders. The options will also be physically settled, meaning the actual Bitcoin will be delivered when options are exercised, instead of just cash.
According to the SEC, IBIT options will be subject to Nasdaq’s standard listing and trading rules. The exchange’s initial listing standards require that the underlying security, in this case, the Bitcoin ETF, must have a significant number of outstanding shares that are actively traded and widely held. This ensures liquidity and stability in the market for these options.
What Comes Next?
While the SEC’s approval is a major milestone, it’s not the final hurdle. Bloomberg ETF analyst Eric Balchunas highlighted that the options for the IBIT ETF still need clearance from the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC) before they can officially be listed for trading. Both entities do not have strict timelines for approval, meaning there may still be a waiting period before the options hit the market. However, the SEC’s decision signals a growing acceptance of Bitcoin ETFs and a likely expansion soon.
Balchunas added on social media platform X (formerly Twitter) that this could pave the way for more spot Bitcoin ETF options to be approved in the near term. “This is just one stage of approval,” he noted. “The other two [OCC and CFTC] don’t have a ‘clock,’ so not sure when they’ll be approved. A big step though nonetheless that the SEC came around.”
Growing Interest in Bitcoin ETFs
Interest in Bitcoin ETFs continues to soar. On August 5th, the IBIT Bitcoin ETF saw its trading volume surge to over $875 million. Across all spot Bitcoin investment vehicles, the total trading volume exceeded $1.3 billion, underscoring the growing interest in these financial products. As more investors seek exposure to Bitcoin through regulated financial instruments, the approval of options trading on Bitcoin ETFs opens up new opportunities for both retail and institutional investors.
Nasdaq has also filed a request with the SEC to allow options trading for spot Ethereum ETFs, a move that could further solidify cryptocurrency’s place in mainstream finance. If approved, this could lead to a wider range of crypto-based products available for traders, expanding the reach and appeal of digital assets in the traditional financial markets.
The SEC’s approval for options trading on BlackRock’s spot Bitcoin ETF is a significant development in the evolving cryptocurrency market. The crypto industry is gaining more legitimacy in traditional financial markets with options providing more ways to hedge, speculate, and invest. While additional approvals are still required, this move by the SEC indicates that Bitcoin ETFs—and potentially Ethereum ETFs—are on a fast track to becoming a staple in the financial ecosystem.
As investors keep a close eye on further regulatory developments, the crypto market could see an influx of new investment opportunities, bringing even more liquidity and innovation.