BlackRock gets SEC approval for Bitcoin ETF options trading

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Grafa2024/09/23 06:35

By:Mahathir Bayena

The U.S. Securities and Exchange Commission (SEC) has approved BlackRock’s proposal to offer options trading for its iShares Bitcoin Trust (IBIT), a key development for the asset manager’s spot Bitcoin (CRYPTO:BTC) ETF.

This approval comes about eight months after BlackRock launched its spot Bitcoin ETF in January 2024.

On September 20, the SEC issued a notice allowing options trading for BlackRock’s Bitcoin ETF on Nasdaq.

This approval enables investors to trade options, which allow the right to buy or sell the underlying Bitcoin ETF at a predetermined price and time.

Bloomberg analyst Eric Balchunas praised the decision, describing it as a "huge win for the Bitcoin ETFs" that could attract more liquidity, in turn drawing larger institutional investors.

However, Balchunas noted that further approvals are still needed from the Commodity Futures Trading Commission (CFTC) and the Office of the Comptroller of the Currency (OCC) before trading can officially begin.

This approval positions BlackRock ahead of competitors such as Grayscale and Bitwise, who are also seeking to launch their own spot Bitcoin ETFs.

Analysts believe these firms could soon receive similar approvals, intensifying competition in the market.

Nate Geraci, an ETF expert, highlighted the next significant step for Bitcoin ETFs is the introduction of in-kind creation and redemption.

This process would allow investors to directly deposit Bitcoin into the fund, improving trading efficiency and reducing costs associated with investing in Bitcoin ETFs.

At the time of reporting, the Bitcoin price was $63,776.54.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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