On October 18, the U.S. Securities and Exchange Commission (SEC) made a significant move by granting approval for spot Bitcoin exchange-traded funds (ETFs) to be listed as options on the New York Stock Exchange (NYSE) and Chicago Board Options Exchange (CBOE).
Expansion of ETF Options Approvals
This approval builds on the SEC’s previous endorsements of funds like the Fidelity Wise Origin Bitcoin Fund and ARK21Shares Bitcoin ETF. One notable addition among the 11 recently approved ETFs is BlackRock’s iShares Bitcoin Trust ETF. This development is seen as a major opportunity for institutional traders and investors.
The newly approved options offer investors more flexibility and cost-effective ways to increase their exposure to Bitcoin and manage risks. The SEC has stated that these options will improve liquidity, enhance price efficiency, and reduce volatility. The ultimate goal is to increase transparency in the market.
Jeff Park, a manager at Bitwise, believes that these options will bring liquidity to Bitcoin markets and could potentially entice some investors to purchase Bitcoin. “Options can add liquidity to the market and may compel short-position traders to buy Bitcoin,” he said.
Advantages for Institutional Investors
Following this approval, Bitcoin’s value experienced a surge. After the news broke, the price of Bitcoin rose by 1.29%, reaching $69,125. The CBOE initially proposed this rule change in August 2024, and the SEC’s approval covers all listed ETFs except for the Grayscale Bitcoin Mini Trust.
In conclusion, the approval of Bitcoin ETF options contributes to the maturation and broader acceptance of the cryptocurrency market. It opens up more opportunities for institutional investors while introducing new investment tools to the market.
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Disclaimer: The information provided in this article should not be considered as investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
