SEC Approves Nasdaq Bitcoin Options Listing With BlackRock ETF

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SEC Approves Nasdaq Bitcoin Options Listing With BlackRock ETF
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The United States Securities and Exchange Commission (SEC) has approved a rule change that will allow Nasdaq’s International Securities Exchange to list and trade options on BlackRock’s iShares Bitcoin Trust (IBIT), a popular Bitcoin-linked exchange-traded fund (ETF).

This decision marks a new step forward in the expansion of cryptocurrency-related derivatives products, offering investors more options to manage their exposure to the Bitcoin market.

BlackRock has been seeking approval since March of this year, following the SEC’s approval of several Bitcoin-linked ETFs in the US. The recent approval follows a series of amendments that Nasdaq ISE has filed. These amendments were intended to address concerns about market manipulation and excessive risk in an emerging market for cryptocurrency options.

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One of the key amendments introduces position and exercise limits for IBIT options at 25,000 contracts. Nasdaq ISE described those limits as “extremely conservative” given the fund’s market size and liquidity, according to SEC filings.

SEC Approves Bitcoin Options on Nasdaq

The options on IBIT will be physically settled and will have an American-style exercise. This will provide investors with an additional hedging tool to manage the risks associated with Bitcoin. Since the launch of the BlackRock ETF earlier this year, the fund has attracted significant attention from both institutional investors and the general public. The Bitcoin ETF has become one of the most liquid Bitcoin-related products in the U.S. market.

While the SEC’s approval represents a step forward, the move comes amid ongoing concerns about the potential risks associated with cryptocurrency derivatives. During the review process, letters sent to the SEC highlighted concerns about market volatility and the impact of cryptocurrencies’ increased integration into traditional financial markets. Some experts have urged the SEC to delay approval until the Bitcoin market has further stabilized.

Despite the concerns, the SEC concluded that Nasdaq’s surveillance mechanisms, including real-time monitoring and surveillance-sharing agreements with the CME, would be sufficient to prevent market manipulation.

Bitcoin’s price is up about 1.0% over the past 24 hours, according to data from CoinGecko. At the time of writing, the cryptocurrency is trading at $63,460.

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