The US Security and Exchange Commission (SEC) is getting feedback from the public and is ready to approve a rule change that allows Bitcoin exchange-traded funds (ETFs) to be listed on exchanges and traded on derivatives. The start of this move by NYSE was a result of the demand generated by the trading of options on BITC, GBTC and other trusts that hold Bitcoin directly.
In case the proposal is approved, the event will become a watershed moment in terms of crypto products integration into financial markets, since (ETFs) will give new ways for the stock market participants to hedge, earn income, and play with the price of Bitcoin through ETFs.
The proposed amendment indicates the possibility that the different options of the Bitcoin ETF will be traded in a manner similar to options on other ETFs, including that based on commodities. This should cover the regulatory aspects ranging from listing mechanisms to expiry dates, strike prices, strike prices, lower price variations, various limits and customer accounts maintenance requirements, trading suspensions and restarts, etc. In addition to the Bitcoin ETF futures, the traditional financial products likewise demonstrate the supporters’ growing interest towards cryptocurrency.
Regulatory Path and Market Implications
The SEC would consider changing the rule after the approval for listing of spot Bitcoin ETFs on Wall Street for trading which came on January 10, marking a historical move, which for years, had cases of rejection. This evolution may be witnessed as a possible move by the regulatory body towards a friendlier stance towards cryptocurrency products, opening the door for wider options of Bitcoin-based investments in the market. BlackRock, the world’s leading asset manager, has also filed with the Chicago Board Options Exchange (CBOE) for rule revision in order for the practices to be listed as Bitcoin ETF. This is one example of institutional interest in such products.
According to Bloomberg’s ETF analyst James Seyffart and other experts, the SEC could make its final ruling on the proposed changes by next September at the latest. Approval of options trading of Bitcoin ETFs would not only offer alternative instruments for investors to create more sophisticated trading strategies, but also improve liquidity and price discovery mechanisms for Bitcoin as an asset class.
Grayscale CEO Michael Sonnenshein highlights the strategic importance for the crypto industry in having derivatives products approved as they bring investors new ways to navigate the markets and generate income.
Bitwise CEO Announces Major Milestone for Bitcoin ETF
In a related development, Bitwise CEO Hunter Horsely announced a significant milestone for the cryptocurrency investment landscape. The Bitwise Bitcoin ETF, known as BITC, has been made accessible for recommendation by Registered Investment Advisors (RIAs) within one of the largest investment advisor networks in the USA, boasting assets under management of $30 billion.
This announcement signifies a major step forward in the integration of cryptocurrency investments into traditional financial advisory services, offering institutional investors and their clients a regulated avenue for incorporating Bitcoin into diversified investment portfolios.
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