Nasdaq Pushes for Regulatory Approval to Launch Bitcoin Index Options

28. Aug 2024 Posted by Laurent C. on News

Nasdaq is moving forward with plans to introduce and trade options on a Bitcoin index, aiming to expand the range of financial products available for cryptocurrency investors. On Tuesday (Aug 27), the exchange operator revealed that it is currently seeking regulatory approval to launch these new options, which could provide traders and institutional investors with a novel way to manage their Bitcoin exposure.

Despite the growing popularity of Bitcoin ETFs, including the iShares Bitcoin Trust ETF by BlackRock, which boasts a market size of $21.3 billion, the U.S. Securities and Exchange Commission (SEC) has yet to greenlight options tied to these funds. Nasdaq's proposal to offer options on a Bitcoin index marks a significant step towards filling this gap in the market.

These Bitcoin index options are designed to offer a cost-effective and efficient means for investors to enhance their exposure to Bitcoin, which remains the largest cryptocurrency by market capitalization. Matt Hougan, Chief Investment Officer at Bitwise, a key player in bringing Bitcoin ETFs to market this year, emphasized the importance of these options. “For the Bitcoin asset class to become fully integrated into the broader financial market, having options available is crucial,” he noted, adding that ETF options would complete the liquidity framework necessary for robust trading.

The new Nasdaq Bitcoin Index Options are expected to follow the CME CF Bitcoin Real-Time Index, a benchmark specifically developed by CF Benchmarks to monitor Bitcoin futures and options traded on CME Group's platform. This alignment with the CME CF Bitcoin Real-Time Index ensures that the proposed options will be based on a reliable and widely recognized standard in the cryptocurrency space.

Overall, Nasdaq’s initiative underscores the ongoing evolution of the cryptocurrency market, offering more sophisticated tools for both traders and institutional investors to navigate the dynamic world of digital assets.