Nasdaq is seeking regulatory approval to introduce and trade options on a new Bitcoin index, the exchange operator announced on Tuesday. The US Securities and Exchange Commission (SEC) has not yet approved options for any of the spot Bitcoin exchange-traded funds (ETFs) that have started this year, including Nasdaq’s request for options on BlackRock’s iShares Bitcoin Trust ETF which is worth $21.3 billion.
Matt Hougan Advocates for Bitcoin Options to Boost Market Efficiency
The Bitcoin index options that have been proposed here would create an efficient means for institutional investors and traders to hedge their Bitcoin risks. These index options, which are listed derivatives, would enable investors to protect or amplify their exposure to Bitcoin, the most valuable digital coin.
Speaking of options availability, Matt Hougan, Bitwise’s chief investment officer said that option availability is a must for the crypto market to get to an even higher level of standardization and efficiency.
Options are security that enables a purchaser to engage in a transaction for an asset on a stated price on a particular date. Some of them are employed by traders to increase their purchasing capacity, while others are employed by institutional investors to hedge the risks encountered when doing business.
The proposed Nasdaq Bitcoin Index Options will be introduced based on the CME CF Bitcoin Real-Time Index, which has been created by CF Benchmarks to take into account the value of Bitcoin futures and options at the CME Group Exchange.
In the meantime, traders have sought out other products as they await the decision of the SEC on these options. These are newly formed leveraged ETFs associated with Bitcoin and options on such products. Since the beginning of the year when it was evident that the SEC would approve the ETFs, there were applications for the spot Bitcoin ETF options. However, these applications have been recently refined following the feedback given by the SEC in the latest weeks.
