On October 18, the U.S. Securities and Exchange Commission (SEC) made a significant move by granting approval for the listing of options for spot Bitcoin exchange-traded funds (ETFs) on the New York Stock Exchange (NYSE) and Chicago Board Options Exchange (CBOE).
Expansion of ETF Options Approvals
The SEC’s approval builds upon its previous support for funds like the Fidelity Wise Origin Bitcoin Fund and ARK21Shares Bitcoin ETF. 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-effectiveness in increasing their Bitcoin exposure and managing risks. The SEC believes that these options will improve liquidity, enhance price efficiency, and reduce volatility. Additionally, the aim is to promote market transparency.
Jeff Park, a manager at Bitwise, stated that these options will bring liquidity to Bitcoin markets and potentially entice some investors to purchase Bitcoin. “Options can add liquidity to the market and may compel short-position traders to purchase Bitcoin,” he explained.
Advantages for Institutional Investors
Following the approval, Bitcoin’s value experienced a rise. After the news broke, the price of Bitcoin increased by 1.29%, reaching $69,125. The CBOE originally 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 of the cryptocurrency market and its broader acceptance. It creates more opportunities for institutional investors while introducing new investment tools to the market.
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Disclaimer: The information provided in this article is not investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry risks, and they should conduct their own research.