Nasdaq applies to trade options on bitcoin index as crypto demand grows
As regulatory approval lingers, traders are turning to other products like leveraged ETFs tied to bitcoin while waiting for new options on bitcoin ETFs.
Nasdaq is seeking regulatory approval to launch and trade options on a bitcoin index, offering institutional investors and traders a new way to hedge and amplify their exposure to the cryptocurrency. The United States Securities and Exchange Commission (SEC) has not approved options based on bitcoin-related exchange-traded funds (ETFs), including Nasdaq’s application to trade options on BlackRock’s $21.3 billion iShares Bitcoin Trust ETF.
The new bitcoin index options would provide a quicker and more affordable method for traders to gain access to the cryptocurrency market. Options are derivatives that allow the holder to buy or sell an asset at a set price by a predetermined date, making them a popular tool for traders and investors to manage risk and enhance liquidity.
Nasdaq’s proposed options would track the CME CF Bitcoin Real-Time Index, which monitors bitcoin futures and options contracts on the CME Group exchange. This development comes as institutional demand for bitcoin-based financial products grows despite the SEC’s slow approval process for options on newly launched spot bitcoin ETFs.
While awaiting regulatory decisions, traders have explored other products, such as leveraged ETFs tied to bitcoin. Exchanges initially applied for the spot bitcoin ETF options as soon as the SEC approved the underlying ETFs but have since adjusted their filings in response to the regulator’s comments.
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