SEC Approves Listings of NYSE, CBOE Bitcoin Options ETFs
On October 18, the United States Securities and Exchange Commission (SEC) approved applications from the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE) for the long-awaited spot Bitcoin (BTC) exchange for options-exchange-traded funds (ETFs).
Options trading is now available for 11 NYSE-approved ETF providers, including Fidelity Wise Origin Bitcoin Fund, ARK21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, Franklin Bitcoin ETF, VanEck Bitcoin Trust, WisdomTree's Bitcoin Fund, Grayscale's Bitcoin Trust, Grayscale Bitcoin Mini Trust, Bitwise Bitcoin ETF. , BlackRock's iShares Bitcoin Trust ETF and Valkyrie Bitcoin Fund.
The Chicago Board Options Exchange also filed an application in August 2024 to list bitcoin ETF options through a rule change. This change in regulatory policy puts Bitcoin ETF options in the same category as other commodity-based ETFs that the SEC has allowed to list on the CBOE, with the exception of Greyscale's Bitcoin Mini Trust.
Source: Securities Exchange Commission
Related: SEC Again Delays Decision on Ethereum ETF Options
The impact on markets is due to increased liquidity and short compression
Investors believe that the introduction of options for Bitcoin ETFs will inject much-needed liquidity into the Bitcoin markets – an indicator for higher price action.
Bitwise CEO Jeff Park argued that the approval of options for ETF products represents a major upgrade from LedgerX and Deribit, which lack central guarantees.
Park hinted that there could be options to create a situation where highly leveraged short traders are “squeezed short” and forced to buy bitcoins to cover their positions.
“To say you can't short-circuit a trillion-dollar asset is like saying you can't make an elephant dance. Sure, it's big, but if you tie enough strings to its legs and pull it hard enough, even the biggest creature can be. It moves in a way it doesn't want to.”
According to Tom Dunleavy, managing partner of investment firm MV Global, the introduction of options acts as a mechanism to dampen Bitcoin's high volatility and smooth markets over time.
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