The US Securities and Exchange Commission (SEC) has approved BlackRock's proposal to offer options trading for its spot bitcoin ETF (exchange-traded fund).
On Friday, September 20, the SEC released An approval notice for options trading for the iShares bitcoin Trust (IBIT) on Nasdaq. This would come about eight months after the SEC gave the green light to applications from the world’s largest asset manager and a dozen other firms to launch spot bitcoin ETFs.
Following the launch of the bitcoin ETF in January, BlackRock was quick to propose listing and trading options on its product. For context, options are derivatives that give holders the right to buy or sell an underlying asset at a predetermined price and time.
The regulator's notice said:
The Commission is issuing this notice to solicit comments on Amendments Nos. 4 and 5 from interested persons, and is approving the proposed rule change, as modified by Amendments Nos. 1, 4, and 5, on an expedited basis.
<img data-recalc-dims="1" decoding="async" class="aligncenter wp-image-324325 size-large" src="https://technicalterrence.com/wp-content/uploads/2024/09/BlackRock-gets-green-light-from-SEC-for-Bitcoin-spot-ETF.png" alt="bitcoin Spot ETF” width=”848″ height=”660″ srcset=”https://bitcoinist.com/wp-content/uploads/2024/09/Screen-Shot-2024-09-21-at-01.24.39.png?w=1562 1562w, https://bitcoinist.com/wp-content/uploads/2024/09/Screen-Shot-2024-09-21-at-01.24.39.png?w=540 540w, https://bitcoinist.com/wp-content/uploads/2024/09/Screen-Shot-2024-09-21-at-01.24.39.png?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/09/Screen-Shot-2024-09-21-at-01.24.39.png?w=848 848w, https://bitcoinist.com/wp-content/uploads/2024/09/Screen-Shot-2024-09-21-at-01.24.39.png?w=1536 1536w, https://bitcoinist.com/wp-content/uploads/2024/09/Screen-Shot-2024-09-21-at-01.24.39.png?w=750 750w, https://bitcoinist.com/wp-content/uploads/2024/09/Screen-Shot-2024-09-21-at-01.24.39.png?w=1140 1140w” sizes=”(max-width: 848px) 100vw, 848px”/>
Source: SEC
It is worth mentioning that other asset management firms, including Grayscale and Bitwise, are also looking to list spot bitcoin ETFs. Bloomberg analyst Eric Balchunas stated in an article x.com/EricBalchunas/status/1837240128588169587″ target=”_blank” rel=”noopener nofollow”>Post on x He hopes that these companies' proposals will be approved “shortly.”
Balchunas added:
Big win for bitcoin ETFs (as they will attract more liquidity, which in turn will attract more big fish). It's a nice surprise in terms of timing, but not a surprise, as James Seyffart and I gave it a 70% chance of approval by the end of May.
The Bloomberg analyst also noted that this latest permit for the Nasdaq exchange is just one stage of approval, as the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC) need to validate it before trading can officially begin.
What's next for bitcoin spot ETFs?
ETF expert Nate Geraci also took to the x platform to weigh in on the SEC's latest approval of options trading, explaining next steps for the firm.of bitcoin ETFs. The president of ETFStore highlighted the positive performance of crypto products despite certain limitations.
<blockquote class="twitter-tweet” data-width=”500″ data-dnt=”true”>
Remember, btc spot ETFs have raised a net $18 billion in 8 months…
No options trading, no creation or redemption in kind, and limited approval on major brokerage platforms (plus no access on Vanguard).
Monumental success with one hand tied behind the back.
– Nate Geraci (@NateGeraci) twitter.com/NateGeraci/status/1837254506381218272?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>September 20, 2024
According x.com/NateGeraci/status/1837253314997567855″ target=”_blank” rel=”noopener nofollow”>geraciThe introduction of creation and redemption in kind should be the next milestone for bitcoin exchange-traded funds. To put it into context, creation and redemption in kind refers to the process by which large investors can create or redeem ETF shares by exchanging them for the underlying asset (bitcoin, in this case).
Related reading: SEC and Coinbase on pause: US regulator requests four-month delay in reporting
The introduction of creation and redemption in kind will increase the efficiency of bitcoin ETF trading as investors will be able to deposit btc directly into the fund. This would reduce the cost of investing in spot bitcoin ETFs and make them a more attractive investment product.
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The price of bitcoin on the daily timeframe | Source: BTCUSDT chart on x/zkCmlawJ/" target="_blank" rel="noopener nofollow">TradingView
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