“Good News From MJP About BITCOIN”
Nasdaq has started a new application to get index options approved by the SEC, which means Bitcoin will soon have a lot more money floating about.
On Tuesday, Nasdaq, the operator of the exchange, revealed that it is requesting permission from regulators to launch options trading on an index that tracks bitcoin.
Even though several exchange-traded funds (ETFs) linked to spot bitcoin prices debuted in January—including Nasdaq’s proposal to trade options on BlackRock’s $21.3 billion iShares Bitcoin Trust ETF (IBIT.O)—the U.S. Securities and Exchange Commission has not yet authorized any of these options.
Bitcoin is the largest cryptocurrency, and the suggested index options would give institutional investors and traders a fast and cheap way to hedge their Bitcoin bets.
The overall liquidity of Bitcoin will be greatly enhanced by this flood of new cash.
To completely incorporate this asset class into the market, Bitwise’s chief investment officer, Matt Hougan, stressed the significance of offering bitcoin options:
“ETF options would give us a better picture of liquidity, but we’re not getting it.”
A financial derivative known as an option grants the holder the right, at a specified date, and at a defined price, to purchase or sell an underlying asset (such as a stock or ETF).
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They are a common tool for institutional investors to control risk and a cheap way for traders to increase their buying power.
CF Benchmarks developed the CME CF Bitcoin Real-Time Index to track bitcoin futures and options contracts on the CME Group (CME.O). The Nasdaq Bitcoin Index Options would follow this index
As investors wait for authorities to decide on the new spot bitcoin ETFs, they have been looking to alternative products, such as the leveraged ETFs that are tied to bitcoin and the options on those funds, which were just launched.
As soon as it became apparent that the underlying bitcoin ETFs would be approved by the SEC in January, exchanges started filing choices on spot bitcoin ETF applications.
Nevertheless, Reuters reports that some exchanges have recently withdrawn their applications and resubmitted them after receiving comments from the SEC.
