In a notice published on Sept. 20, the U.S. Securities and Exchange Commission (SEC) approved Nasdaq’s request to list and trade options for BlackRock’s spot Bitcoin exchange-traded fund (ETF).
The regulatory body granted approval for options trading on the iShares Bitcoin Trust, which will trade under the ticker symbol IBIT on Nasdaq. The exchange confirmed that these options would be traded similarly to other ETF options, adhering to the same rules.
SEC approves IBIT trading options, initiating regulatory review process
The approval process commenced at the beginning of January when Nasdaq ISE filed a proposal to list and trade options on BlackRock’s Spot Bitcoin ETF. After amendments and public comments, the SEC initiated proceedings to evaluate the proposal, addressing concerns over market manipulation, investor protection, and liquidity.
According to the SEC notice:
Options on IBIT will be physically settled with American-style exercise. Nasdaq also clarified that IBIT options will be subject to its initial and ongoing listing standards. Among these requirements is the expectation that the underlying security for listed options must have a “substantial number of outstanding shares that are widely held and actively traded.
~SEC
Bloomberg ETF analyst Eric Balchunas speculated on X (formerly Twitter) that this is only one step in the approval process, as both the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC) must also approve the options before they can officially be listed. While these agencies do not operate on a fixed timeline, the SEC’s approval represents a significant milestone.
A step toward broader Bitcoin integration and new investment opportunities
This approval by the SEC continues the trend of expanding regulated financial products based on BTC, pushing it closer to full integration within the global financial system. The ability to trade options on a spot Bitcoin ETF provides new opportunities for institutional investors who wish to engage with the Bitcoin market while maintaining a higher level of risk management.
As of Aug. 5, trading volume for the IBIT Bitcoin ETF surpassed $875 million, while total trading for all spot BTC investment vehicles exceeded $1.3 billion. Additionally, Nasdaq has requested the SEC to permit options trading for spot Ethereum ETFs on its exchange.
Just the New York Stock Exchange (NYSE) American and the Nasdaq International Securities Exchange (ISE) retracted their applications for Bitcoin options. On August 8, Cboe withdrew its previous application for BTC ETF options but has since submitted a new application with a broader scope.
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