Bitcoin ETF Options: SEC Paves the Way for Nasdaq to List BlackRock’s iShares Bitcoin Trust

Bitcoin ETF- BlackRock’s Spot Bitcoin ETF Gains Approval for Options Trading on Nasdaq

Bitcoin ETF– The US Securities and Exchange Commission (SEC) has given the green light for Nasdaq’s proposal to list and trade options for BlackRock’s spot Bitcoin exchange-traded fund (ETF). This significant move marks a notable advancement in the cryptocurrency investment landscape.

Details of the Approval

According to a notice issued on September 20, the SEC has cleared the way for options trading on the iShares Bitcoin Trust, which will trade under the ticker symbol IBIT. Nasdaq confirmed that the exchange will treat options on the Bitcoin ETF similarly to other ETF options, adhering to established rules and trading procedures.

Options on IBIT will be physically settled with American-style exercise, the SEC’s notice states. This means that investors can exercise these options at any time before their expiration date, providing added flexibility.

Compliance with Listing Standards

The listing of options will follow Nasdaq’s initial and continued listing standards, which require that the underlying security for a listed option must have a substantial number of outstanding shares that are widely held and actively traded. This requirement ensures liquidity and investor interest in the ETF.

Broader Context of Options Trading in Crypto

Earlier in August, the Cboe Exchange submitted an amended application to regulators to list options on Bitcoin and Ether ETFs. These applications propose listing options tied to ETFs managed by various asset managers, including Fidelity, Grayscale, and Valkyrie, among others. The proposed rule change would categorize these spot cryptocurrency ETFs alongside traditional commodities-based ETFs like the Goldman Sachs Physical Gold ETF as securities deemed appropriate for options trading.

Recent Developments in Cryptocurrency Options

This move comes shortly after Nasdaq’s announcement on August 27 to list Bitcoin options linked to the CME CF Bitcoin Real-Time Index (BRTI), which benchmarks Bitcoin’s spot price. Interest in cryptocurrency derivatives is on the rise in the U.S., indicating a growing acceptance of crypto-related investment vehicles.

In recent months, several exchanges, including the New York Stock Exchange (NYSE) American and Nasdaq International Securities Exchange (ISE), have retracted their applications for Bitcoin options. For instance, Cboe withdrew its earlier application for BTC ETF options on August 8 but has since refiled with a broader scope.

Understanding Options Contracts

Options contracts provide investors with the right to buy or sell an underlying asset at a specified price, functioning as both a hedge and a speculative instrument. The interest in cryptocurrency derivatives on regulated exchanges is expanding, with open options interest on BTC futures ETFs surpassing $3.25 billion as of August 9, according to data from The Options Clearing Corporation.

The Future of Solana ETFs

Plans to list Solana (SOL) ETFs are still active, with VanEck indicating that its plans for a Solana ETF are still in play. This comes despite Cboe Global Markets withdrawing a regulatory filing to list the fund on its exchange. The SEC’s stance on Solana, which has previously classified it as a security in various court filings, remains a challenge for issuers.

Issuers are now considering new filings or amendments to the 19b-4 forms to make a more compelling argument that Solana should not be classified as a security. While Bitcoin and Ethereum ETFs have successfully navigated regulatory hurdles and commenced trading, market analysts remain skeptical about the potential for Solana ETFs in the near future.

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