The SEC has approved the NYSE and CBOE to offer options tied to Bitcoin ETFs, which are investment funds that track the price of Bitcoin. This approval happened on October 18, 2024.
Investors will soon be able to trade options on ETFs from Fidelity, Grayscale, and VanEck, among others, following the SEC’s swift approval, which signals its growing acceptance of cryptocurrencies.
The New York Stock Exchange (NYSE), the world’s largest stock exchange, facilitates the buying and selling of company shares through both floor and electronic trading, serving as a key indicator of the stock market’s health.
The CBOE, specializing in options trading, offers contracts that allow investors to buy or sell assets at a predetermined price before a specific date. It has been instrumental in standardizing options trading, and enhancing market efficiency.
On August 15, 2024, the NYSE American filed a request with the Securities and Exchange Commission (SEC) to amend a rule.
If approved, this change would permit trading options—a type of financial contract—for various Bitcoin-based funds, including those from Fidelity, ARK 21Shares, Invesco, Franklin, VanEck, WisdomTree, Grayscale, Bitwise, and iShares.
The request, made public on September 4, 2024, was updated three times: September 9 (Amendment No. 1), October 7 (Amendment No. 2), and October 11 (Amendment No. 3).
A Bitcoin ETF (Exchange-Traded Fund) is a financial product that allows people to invest in Bitcoin without buying it directly. Instead of owning Bitcoin, investors purchase shares in the ETF, which mirrors Bitcoin’s price.
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This approach enables investment in Bitcoin through regular stock markets, eliminating the need for a crypto wallet or concerns about storing Bitcoin. It offers a simpler and more familiar pathway for traditional investors to engage with Bitcoin.
This approval indicates that regulators are becoming more comfortable with crypto-related investments, recognizing them as part of the future financial landscape.
As more options become available, institutional investors, such as large companies or funds, are expected to increase their involvement in the cryptocurrency space.
