BlackRock spot BTC ETF options gets green light

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The United States Securities and Exchange Commission (SEC) has given Nasdaq the thumbs up to list and trade shares of options for BlackRock’s spot BTC exchange-traded fund (ETF).

In a September 20 notice, the SEC approved options trading for the iShares BTC Trust under the ticker symbol IBIT on Nasdaq—a stock exchange based in New York City. It is the second-largest in the world in terms of total market capitalization (after the New York Stock Exchange). It is known for listing leading tech companies.

According to Nasdaq, the exchange will allow trading for options on the BTC ETF “in the same manner” as other ETF options, following the same rules.

An ETF is an investment fund that lets you buy a mix of assets, such as stocks or bonds, in a single purchase. It trades on stock exchanges much as a regular stock would. A BTC ETF is a specific ETF that tracks the price of BTC, allowing people to invest in BTC without directly owning or managing the digital asset itself.

BTC ETFs were the subject of much speculation and debate in 2023, followed by some strategic stalling by the SEC before the financial markets watchdog eventually approved the product in January.

The SEC’s approval last Friday for listing and trading options tied to a BTC ETF represents a further boost for digital currencies and a move closer to mainstream acceptance since the launch of BTC ETFs earlier this year.

“Options on IBIT will be physically settled with American-style exercise,” said the SEC. “The Exchange stated that options on IBIT will be subject to the Exchange’s respective initial and continued listing standards. The Exchange’s initial listing standards require, among other things, that the security underlying a listed option be ‘characterized by a substantial number of outstanding shares that are widely held and actively traded.’”

The regulator did not mention whether it would move forward with approving the listing and trading of options for spot BTC ETFs with other U.S. exchanges. However, some commentators took the development as a positive signal of further approvals down the line.

Bloomberg ETF analyst Eric Balchunas predicted on X that more offerings would be “approved in short order.”

“This is just one stage of approval, the OCC [Office of the Comptroller of the Currency] and CFTC [Commodity Futures Trading Commission] has to approve as well before they officially list,” said Balchunas. “The other two don’t have a ‘clock’ so not sure when they’ll be approved. A big step tho nonetheless that the SEC came around.”

According to an August 6 regulatory filing with the SEC, Nasdaq has also requested approval for spot Ethereum ETF options trading.

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