The U.S. Securities and Exchange Commission (SEC) has approved the listing of options for Bitcoin exchange-traded funds (ETFs) on both the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE).
The decision, announced on October 18, 2024, allows 11 Bitcoin ETF providers to offer options trading. Firms such as Fidelity, ARK Invest, BlackRock, and Grayscale now have the green light to list options, potentially changing the landscape for Bitcoin trading and investment strategies.
Bitcoin ETFs themselves have gained significant traction among investors since they provide a regulated and easily accessible way to gain exposure to Bitcoin without the need to deal directly with the complexities of owning the cryptocurrency. By adding options to these ETF products, traders and investors now have a broader toolkit at their disposal to manage risk or enhance returns.
As per NYSE’s filing, the SEC granted “accelerated approval” for the listing and trading of options on the Fidelity Wise Origin Bitcoin Fund, ARK21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, Franklin Bitcoin ETF, VanEck Bitcoin Trust, WisdomTree Bitcoin Fund, Grayscale Bitcoin Trust, Grayscale Bitcoin Mini Trust, Bitwise Bitcoin ETF, iShares Bitcoin Trust ETF, and Valkyrie Bitcoin Fund.
Similarly, the SEC approved CBOE’s request on an accelerated basis for listing and trading options on the same products: Fidelity Wise Origin Bitcoin Fund, ARK21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, Franklin Bitcoin ETF, VanEck Bitcoin Trust, WisdomTree Bitcoin Fund, Grayscale Bitcoin Trust, Bitwise Bitcoin ETF, iShares Bitcoin Trust ETF, and Valkyrie Bitcoin Fund, according to a Friday filing.
“Specifically, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, which requires that an exchange have rules designed to prevent fraudulent and manipulative acts and practices, to remove impediments to and perfect the mechanism of a free and open market, and to protect investors and the public interest,” both filings read.
Last month, the SEC approved listing options on the iShares Bitcoin Trust on Nasdaq ISE, LLC.
“They approved same thing for Nasdaq recently so not a big surprise but still good news as SEC was big hurdle,” Bloomberg’s senior ETF analyst Eric Balchunas said in a post on X.
Meanwhile, Jeff Park, an executive at Bitwise, pointed out that these new options could even lead to situations where overly leveraged short sellers are forced to buy back Bitcoin to cover their positions, resulting in a “short squeeze.” This could drive Bitcoin prices up as traders scramble to cover their losses.
SEC approved NYSE Bitcoin ETF options! 🔥
Based on interactions from many informed investors on my original post, I compiled the most common questions to go deeper on why I believe Bitcoin ETF options are truly game-changing. Get on board and HODL tight!
Here are the top three: https://t.co/JAfqwRhtPo pic.twitter.com/Q2jMR8y2W4
— Jeff Park (@dgt10011) October 18, 2024
In Park’s words, “Saying you can’t short squeeze a trillion-dollar asset is like saying you can’t make an elephant dance. Sure, it’s huge, but if you tie enough ropes to its legs and pull hard enough, even the biggest creature can be moved in ways it doesn’t want.”
With options now available for Bitcoin ETFs, the market is likely to see new strategies emerge, creating new dynamics in the Bitcoin market, particularly if short squeezes become more frequent.