Options trading on BlackRock’s spot Bitcoin ETF will begin Tuesday, a Nasdaq spokesperson confirmed to Decrypt, ushering in a new form of leveraged Bitcoin exposure on Wall Street.

The Options Clearing Corporation (OCC) updated a document on its website Monday for new options listings, with the equity derivatives clearing organization signaling that the iShares Bitcoin Trust ETF (IBIT)—a $43 billion product—would see options listed on the Nasdaq.

Even though the Securities and Exchange Commission (SEC) approved the listing of options for spot Bitcoin ETFs last month, a memo released by the OCC on Monday represented the last major hurdle toward their launch, according to Bloomberg ETF analyst Eric Balchunas. 

“That’s a wrap,” Balchunas wrote on Twitter (aka X). “Now it's just a matter of when, not if.”

Nasdaq’s Head of ETP Listings Alison Hennessy told Balchunas on Bloomberg TV earlier Monday that the exchange could soon list options for BlackRock’s spot Bitcoin ETF as well.

“Our intent at Nasdaq is to list and trade these options as early as tomorrow,” she said. “Getting these options listed on IBIT into the market will be very exciting for investors.”

The Nasdaq spokesperson later confirmed to Decrypt that the options will indeed be listed Tuesday.

In a one-page document, the OCC said that it’s “preparing for the clearance, settlement, and risk management” of options for spot Bitcoin ETFs. The decision was reached following an advisory released by the Commodities Futures Trading Commission (CFTC), the OCC said.

On Friday, the CFTC’s Division of Clearing and Risk wrote that the listing of options for spot Bitcoin ETFs would not fall under its jurisdiction. Essentially, it cleared the way for the OCC to handle options on spot Bitcoin ETFs by validating their status as SEC-regulated derivatives.

Alongside Bitcoin’s rise to a new peak above $93,000 this year, spot Bitcoin ETFs have become a blowout success on Wall Street, pulling in more than $27 billion since they were approved in January, according to CoinGlass data. BlackRock’s IBIT leads among a clutch of 11 such products, pulling in around $29 billion worth of inflows so far this year on its own.

Analysts told Decrypt last month, following the SEC’s approval, that options for spot Bitcoin ETFs could be a game-changer: While it’s a sign of regulatory progress, the development could also yield greater liquidity for spot Bitcoin ETFs alongside moments of heightened volatility. 

Overall, analysts said that options would make it easier, cheaper, and safer for investors to participate in the Bitcoin market through ETFs. As financial derivatives, options give a buyer the right to buy or sell an asset at a specific price within a given window of time.

Founded in 1973, the OCC is known as the largest equity and derivatives clearing organization in the world. Within the context of SEC-regulated derivatives, the OCC effectively serves as a key intermediary for transferring funds and contracts between buyers and sellers.

Source : Decrypt - Nov 19, 2024