SEC greenlights options trading for BlackRock’s iShares Bitcoin trust

As a seasoned researcher with a decade of experience in the financial markets, I find this development to be an exciting step forward. The SEC’s approval for Nasdaq to list and trade options on BlackRock’s iShares Bitcoin Trust is a significant milestone that underscores the growing acceptance of digital assets by traditional financial institutions.


In simpler terms, the United States Securities and Exchange Commission has given permission for Nasdaq to start offering and trading options based on BlackRock’s Bitcoin investment fund.

According to the information provided in the document submitted on September 20th, the Securities and Exchange Commission’s (SEC) approval follows a thorough review process that began on January 9, 2024. This was when Nasdaq first presented their proposal for trading options on exchange-traded products. In simpler terms, after a long period of evaluation by the SEC, which started in early 2024, Nasdaq’s proposal to trade options on exchange-traded products has finally been approved.

Over the course of several months starting from January 11th, Nasdaq persistently pursued its initial proposal by making numerous adjustments. During this period, they also provided details about IBIT and other Bitcoin-related Exchange Traded Products (ETPs).

SEC’s approval involved multiple stages of review

Following nearly eight months of examination, the Securities and Exchange Commission (SEC) granted approval for Nasdaq’s suggestion. In their statement, the commission noted that Nasdaq had also put forth a plan to amend its regulations to facilitate listing and trading options on IBIT.

As per the formal submission, the trading of IBIT options will result in a physical settlement, following American-style exercise rules. Moreover, it’s been noted by Nasdaq that the IBIT options will continue to comply with their listing requirements.

The regulations for options on IBIT will mirror those already in place for the listing and trading of all ETF options on this exchange,” the document states.

Crypto analysts say decision is bullish

Following the SEC’s decision, prominent cryptocurrency traders and analysts expressed their views on platform X. Ash Crypto, a well-known crypto trader, posted on Twitter that this move is highly optimistic.

Additionally, Senior ETF Analyst Eric Balchunas disclosed information about the approval of X. In a tweet, he expressed his belief that similar approvals may follow shortly.

See below.

The Securities and Exchange Commission (SEC) has recently given expedited approval for the market availability and trading of options based on the stock of IBIT. You can find the complete details here, courtesy of News_Of_Alpha.

— Eric Balchunas (@EricBalchunas) September 20, 2024

Balchunas similarly emphasized that this represents a significant triumph for Bitcoin ETFs, implying it would draw in increased liquidity. Yet, he made it clear that this is merely a step towards approval.

The proposal still needs approval from the OCC and CFTC before the official listing.

It seems likely that other applications for Bitcoin ETFs will be granted soon, marking a significant victory. This development should draw more liquidity, enticing larger investors to join in. While the timing is pleasant, it’s not entirely unexpected as @JSeyff and I predicted a 70% chance of approval by the end of May.

— Eric Balchunas (@EricBalchunas) September 20, 2024

Balchunas remarked that it’s likely other applications will get approval soon, referring to this as a “significant victory” for Bitcoin ETFs. He explained that increased liquidity resulting from the approval would entice larger investors.

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2024-09-21 19:14