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Bitcoin ETF: SEC Considers Option Approval

Mon 26 Feb 2024 ▪ 3 min of reading ▪ by Ariela R.
Getting informed ▪ Crypto regulation

The SEC has recently paved the way for a new era for crypto investors. It is currently seeking comments on a proposed rule change that would allow the listing and trading of options on Bitcoin ETFs.

BitcoinETF
Bitcoin ETF: Is the SEC considering the approval of options?

The Rise of Derivative Products

In January, the SEC had approved Spot Bitcoin ETFs. Recently, it has sought comments on a proposed rule change concerning these assets. Specifically, this proposal aims to authorize the listing and trading of options on Bitcoin ETFs such as Bitwise Bitcoin (BITC) and Grayscale Bitcoin Trust (GBTC), as well as any other trusts holding Bitcoin.

This development marks a significant turning point in the world of cryptocurrencies. Up to now, investors had to purchase and hold physical BTC to participate in the market. With the introduction of options on Bitcoin ETFs, they will now be able to benefit from price fluctuations without owning the virtual currency itself.

Approval of Bitcoin ETF Options: What are the Implications?

If the proposal is approved, the options on Bitcoin ETFs would be traded “in the same way as options on other ETFs (including commodity ETFs) on the exchange”. This would open up new opportunities for investors, while introducing a form of hedging against market volatility.

Investors could use these Bitcoin ETF options to protect themselves against price changes in Bitcoin or to speculate on future movements.

For example, an investor could buy a call option on a Bitcoin ETF if they anticipate a price increase. Conversely, a put option would allow them to protect against a decrease in prices.

Who are the Candidates for the Approval of Bitcoin ETF Options?

Several candidates are positioning themselves for the approval of these options on Bitcoin ETFs:

  • Bitwise Bitcoin ETF (BITC)
  • Grayscale Bitcoin Trust (GBTC)
  • Fidelity Wise Origin Bitcoin Fund
  • VanEck Bitcoin Trust

The growing interest in ETFs and the SEC’s openness to derivative products could signify a significant turning point in the adoption of cryptocurrencies in the United States and around the world.

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Ariela R. avatar
Ariela R.

Je m'appelle Ariela et j'ai 31 ans. J'oeuvre dans le domaine de la rédaction web depuis maintenant 7 ans. Je n'ai découvert le trading et la cryptomonnaie que depuis quelques années. Mais c'est un univers qui m'intéresse beaucoup. Et les sujets traités au sein de la plateforme me permettent d'en apprendre davantage. Chanteuse à mes heures perdues, je cultive aussi une grande passion pour la musique et la lecture (et les animaux !)

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.