Nasdaq Seeks Approval From SEC to Launch Bitcoin Index Options

Nasdaq is seeking regulatory approval from the U.S. Securities and Exchange Commission (SEC) to launch and trade options on a Bitcoin index.

The exchange operator announced this on Tuesday, aiming to provide institutional investors and traders with an additional means to manage their exposure to Bitcoin. The proposed index options would be linked to the CME CF Bitcoin Real-Time Index, which tracks Bitcoin futures and options contracts available on the CME Group’s platform.

Matt Hougan, Chief Investment Officer at Bitwise, commented on the development, stating, “It’s important for options on Bitcoin to be available for this asset class to be fully normalized.” He emphasized that the current market lacks a key piece in the liquidity structure that ETF options could provide. Options, which are financial derivatives allowing the holder to buy or sell an asset at a fixed price by a predetermined date, are seen as tools that can enhance liquidity while offering traders and institutions more flexibility in their investment strategies.

Despite introducing several spot Bitcoin ETFs earlier this year, the SEC has not yet approved options linked to these funds. Nasdaq’s application includes a request to trade options on the iShares Bitcoin Trust ETF by BlackRock, which holds approximately $21.3 billion in assets. Exchanges have been eager to offer options on these ETFs since their launch, but the regulatory process has involved back-and-forth adjustments. Applications were recently withdrawn and refiled in response to feedback from the SEC, according to sources familiar with the matter.

In the meantime, traders have turned to alternative products such as leveraged ETFs to gain amplified exposure to Bitcoin while waiting for a decision on spot Bitcoin ETF options. Introducing Bitcoin index options would allow market participants to manage risk and tailor their exposure to cryptocurrency.

The announcement by Nasdaq comes as the iShares Bitcoin Trust ETF saw its largest daily net inflow in over a month. On Monday, the fund recorded a $224.1 million inflow, marking its highest intake since July 22. This surge occurred during a brief dip in Bitcoin’s price, indicating that investors were positioning themselves to take advantage of market conditions.

Overall, spot Bitcoin ETFs in the U.S. experienced a combined daily net inflow of $202.6 million. However, funds managed by other issuers, including Bitwise and Fidelity, saw net outflows totaling $32.1 million. In the same period, crypto investment products recorded their largest weekly inflows in five weeks, as reported by CoinShares.

Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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