A filing published on September 20 revealed that the U.S. Securities and Exchange Commission (SEC) has approved options trading for BlackRock’s Bitcoin exchange-traded fund (ETF), iShares Bitcoin Trust (IBIT).
This approval opens a new chapter for investors looking to manage their Bitcoin exposure through advanced financial instruments.
The move allows physically settled options on IBIT, further integrating Bitcoin into traditional financial markets. This new tool will allow investors to hedge their positions or amplify returns tied to Bitcoin price fluctuations.
The SEC’s approval comes with strict oversight and position limits to mitigate the risks posed by Bitcoin’s volatility. Approved options will face conservative position and exercise limits, capped at 25,000 contracts. The measure is designed to minimize the likelihood of market manipulation while also ensuring a stable trading environment for investors.
Read more: What is a Bitcoin ETF?
BlackRock’s Bitcoin ETF Could Spark a Chain Reaction
Additionally, the approval process included a thorough assessment of market manipulation and liquidity concerns. Alongside these limits, enhanced oversight mechanisms such as real-time pattern tracking and post-trade monitoring were implemented to prevent market abuse. These safeguards provide greater confidence to investors, ensuring a safer trading experience.
Industry experts were quick to acknowledge the importance of this move. Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, expressed his optimism about the move.
“[This is a] big win for Bitcoin ETFs as it will bring more liquidity and attract larger institutional players. We gave this a 70% chance of approval by the end of May, so this is a welcome development,” Balchunas commented on X (formerly Twitter).
He further emphasized that this approval “will open the door for other Bitcoin ETFs to follow suit, creating a snowball effect in the market.” However, Balchunas noted that while the SEC’s approval is a critical step, “additional approvals from the Commodity Futures Trading Commission (CFTC) and the Options Clearing Corporation (OCC) are still required before trading can officially begin.”
BlackRock’s iShares Bitcoin Trust has long been a leader in the crypto spot ETF space. According to data from SoSo Value, IBIT has a net asset value of over $22.49 billion as of September 20.
Read more: Bitcoin ETF: Pros and Cons
BlackRock IBIT Inflows and Net Assets. Source: SoSo Value
Additionally, in August, BeInCrypto reported that BlackRock filed a proposal with the SEC for options trading on its iShares Ethereum Trust (ETHA) ETF, seeking to list it on the Nasdaq International Securities Exchange.
The article BlackRock’s Bitcoin ETF gets SEC approval for options trading appeared first on BeInCrypto.
