On October 18, the U.S. Securities and Exchange Commission (SEC) approved a new rule. This rule allows the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE) to offer options trading for several spot Bitcoin exchange-traded funds (ETFs). This decision comes at a time when Bitcoin ETFs are seeing strong weekly inflows, marking their best performance in about seven months.
The SEC’s filings showed that both exchanges can list options for spot ETF products. However, there’s a catch. While the NYSE has full approval, the CBOE’s listing does not include Grayscale’s Bitcoin Mini Trust.
According to the SEC, “The Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act.” This section requires exchanges to have rules that prevent fraud and manipulation, promote a free market, and protect investors.
As for when these options will launch, that date hasn’t been confirmed yet. But ETF experts believe this approval will make crypto-related financial products more accessible on major U.S. exchanges. This move is expected to increase liquidity for Bitcoin ETFs and attract more market participants.
Jeff Park, head of alpha strategies at Bitwise, shared some insights. He highlighted that ETF options have advantages over existing BTC options found on platforms like Deribit. ETF options allow for cross-margining, meaning they can work with multiple assets, like GLD.
Park also pointed out that derivatives don’t directly affect Bitcoin supply. Instead, they help USD holders hedge against Bitcoin exposure, which can lower volatility. Moreover, ETF options can significantly influence market conditions for big assets like BTC.
The SEC’s approval comes during a remarkable week for Bitcoin ETFs. According to data, these ETFs attracted over $2 billion in inflows, extending their winning streak to six days. Now, they’ve reached a total of $21 billion in net inflows, driven by strong investor demand.
Nate Geraci, president of the ETF Store, believes this momentum shows robust interest from both retail and institutional investors in Bitcoin ETFs. He predicts that if this trend continues, BTC ETFs could surpass Gold ETFs in market size within the next two years.