By Bernard Goyder, Bloomberg
The Securities and Exchange Commission has given the go-ahead for Nasdaq to list index options based on the price of Bitcoin, the latest sign that Wall Street is becoming more tightly integrated with the world of digital assets.
The instruments will give US equities traders an alternative way to bet on the price of the cryptocurrency, beyond options on the iShares Bitcoin Trust ETF and similar funds.
The derivatives were approved on an “accelerated basis” by the SEC, according to an order posted Friday on the regulator’s website.
The Bitcoin options will be cash settled European style options, meaning that unlike the options on Bitcoin ETFs, there’s no risk of getting exercised if a position is in the money.
While the options have received approval from SEC, they still need a final sign off from the Commodity Futures Trading Commission before they can be listed, according to the SEC order.
The underlying index for the new options will be the CME CF Bitcoin Real Time Index, which updates with data from cryptocurrency exchanges every 200 milliseconds.
They’re far from the first Bitcoin options traded in the US. CME Group has listed options on Bitcoin futures since 2020. But the new Nasdaq-listed contracts would bring Bitcoin options into the equity market, potentially widening access.
The SEC’s conditional approval “represents an important step in expanding regulated, transparent access to digital asset derivatives,” Nasdaq head of US options David Barrett said via email.
SEC Chairman Paul Atkins has been an enthusiastic proponent of expanding crypto trading in the US. The lion’s share of crypto derivatives transactions remain on overseas bourses like Binance and Hyperliquid. In a May 8 speech, Atkins said that the failure of FTX Group in 2022 demonstrated the perils of hosting digital asset trading venues offshore.
“The experience of the offshore growth and implosion of FTX demonstrates the folly of pretending that Americans will not be harmed if we do not address innovative technologies and thereby force them offshore,” he said at the time.
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