Nasdaq Bitcoin Index Options Seeks SEC Approval to Launch

Key Points:

• Nasdaq has applied to the SEC for permission to launch Bitcoin index options.
• If approved, these options potentially increase trading volumes, liquidity, and stability in the volatile Bitcoin market.
• The SEC’s decision on Nasdaq’s proposal could mark a significant step toward the mainstream acceptance of Bitcoin.

According to Reuters, Nasdaq filed with the US Securities Exchange Commission (SEC) for the approval of Bitcoin index options.

Read more: Bitcoin Options Market Expecting A Price of $100,000 

Nasdaq Files with SEC for Launch of Bitcoin Index Options

Nasdaq’s Bitcoin Index Options, which are being proposed, would follow the CME CF Bitcoin Real-Time Index, which tracks the cryptocurrency’s wild market.

Bitcoin index options are considered one of the biggest steps toward legitimizing Bitcoin trading within the mainstream financial markets. If approved, they would then offer an alternative way for institutional investors and traders to hedge exposure to Bitcoins, possibly redefining trading strategies.

Options are financial derivatives that grant the holder the right, either to buy or to sell, an asset like bitcoin at a predetermined price by a specific date. They allow inexpensive ways of risk management, superior liquidity, and a low-cost way of magnifying one’s buying power, so options are of interest both to traders and institutional investors.

SEC Ruling for Nasdaq’s Bitcoin Options May Imply General Cryptocurrency Picks Up

The introduction of the Bitcoin index options would consequently increase the trading volumes and liquidity in the Bitcoin market. This might help to finally stabilize its notorious price volatility. In the words of Matt Hougan, chief investment officer at Bitwise, “It’s important for options on bitcoin to be available for this asset class to be fully normalized.”

Although spot price-related options are not presently approved by the SEC, it can be the indicator that the Nasdaq proposal may sanction broader onboarding toward accepting Bitcoin within financial markets.

Meanwhile, traders have been using leveraged exchange-traded funds and other derivatives to fill the gap until they further understand Bitcoin options. An approval from the SEC will be one milestone step for Bitcoin in its run toward mainstream finance, reflecting on prudently laid regulatory landscapes with a struggle to secure innovation at the cost of investor protection.