The U.S. Commodities and Futures Trading Commission (CFTC) has finally given the ‘green flag’ for the approval for spot Bitcoin ETF options trading. This clears the path for the listing of Bitcoin options products, which will give the BTC ETFs greater exposure on Wall Street. However, there’s still one last approval left to come from the Office of the Comptroller of the Currency (OCC).
CFTC Clears Path for Spot Bitcoin ETF Options
As the US CFTC clears the path for options trading on Bitcoin ETFs, Bloomberg senior ETF analyst Eric Balchunas shared bullish sentiment with the crypto community on November 16: In the official announcement, CFTC noted that its Division of Clearing and Risk (DCR) had done due diligence before the approval. It noted:
“DCR’s position is listing of these shares on SEC-registered national security exchanges does not implicate the CFTC’s jurisdiction, and therefore, the clearing of these options under OCC would be taken in its capacity as a registered clearing agency subject to the SEC oversight”.
The approval of Bitcoin ETF options will allow institutional investors and traders to manage risk or enhance their exposure to Bitcoin’s price movements via the options contracts. These derivative instruments grant the holder the right, but not the obligation, to buy or sell Bitcoin at a predetermined price and within a specified timeframe.
The last decision on the spot Bitcoin ETF options’ approval is now in OCC’s court. Eric Balchunas added that “they are into it, so they’ll prob list very soon.”
Last month, the U.S. SEC approved options trading of spot Bitcoin ETFs for NYSE and Cboe platforms. Now, with the commodities regulator CFTC giving the go-ahead, it marks a major regulatory milestone for Bitcoin enthusiasts awaiting the launch of this options trading facility.
Will Options Trading Create Major Frenzy?
Spot Bitcoin ETF options offer investors a versatile set of strategies to enhance their portfolio management, allowing investors to bet on BTC price movements. Also, it helps by committing less capital against buying Bitcoin or shares of the ETFs directly.
Additionally, this instrument provides a hedge against downside risks. Options provide a way to safeguard existing Bitcoin or Bitcoin ETF holdings from potential price declines. Furthermore, through strategies like covered calls, investors can earn additional income from their existing Bitcoin-related investments. Meanwhile, the sentiment surrounding BlackRock Bitcoin ETF pushing BTC price to $100K continue to gain pace.
Considering all these benefits, the Bitcoin ETF options are likely to create further frenzy and demand for the investment product. Bitwise Chief of Alpha Strategies Jeff Park also showed excitement about this development.
As CFTC provides clearance today (OCC next), Bitcoin ETF options are sooner than you think.
Reposting Part I and II of why this is the most significant market structure change for Bitcoin since the ETF launch.
Read this and be prepared: the monetization of time is accelerating. pic.twitter.com/FuSHfquFMl
— Jeff Park (@dgt10011) November 16, 2024
After the staggering inflows following the Donald Trump victory in early November, spot Bitcoin ETFs are now seeing outflows in the last two days. Nearly $400 million have flowed out in the past two days, with Fidelity’s FBTC leading the majority of the outflows, per Farside Investors.
Moreover, Bitcoin price eyes $100K has continued to show strength gaining another 3.79% in the last 24 hours. The price has shot past $91,000 levels at press time.
Popular analyst Ali Martinez predicted that BTC can hit $100,680 if it closes above $91,900 this week. Earlier, BTC gave a sell signal, he noted.
The TD Sequential recently presented a sell signal on the #Bitcoin daily chart. But now it is at risk of invalidation. If $BTC can print a daily close above $91,900, it could rise toward $100,680! pic.twitter.com/oTLyn36yRR
— Ali (@ali_charts) November 16, 2024
Bhushan Akolkar
Bhushan is a FinTech enthusiast with a keen understanding of financial markets. His interest in economics and finance has led him to focus on emerging Blockchain technology and cryptocurrency markets. He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
