SEC Greenlights Options Trading For BlackRock's Spot Bitcoin ETF, Offering New Hedge For Institutional Investors

The U.S. Securities and Exchange Commission (SEC) has given the green light for the listing and trading of options for BlackRock Inc.’s (NYSE:BLK) spot Bitcoin (CRYPTO: BTC) exchange-traded fund (ETF).

What Happened: The approved options will be listed on the Nasdaq under the ticker symbol “IBIT.” This move allows institutional investors and traders to hedge their exposure to bitcoin more efficiently.

Options trading provides a cost-effective way to amplify exposure to bitcoin, offering an alternative method for managing investments in the world’s largest cryptocurrency. The approval marks another significant step for cryptocurrency, which has been gaining mainstream acceptance.

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Earlier this year, bitcoin ETFs were launched, bringing the asset class closer to widespread adoption. Options give holders the right to buy or sell an asset at a predetermined price by a set date, adding flexibility to investment strategies.

Exchanges began applying for spot bitcoin ETF options as soon as it became evident that the SEC would approve the underlying ETFs in January. The SEC oversees the technical rule changes required for exchanges to list options and confirmed that existing surveillance procedures will apply to IBIT options.

Why It Matters: The approval of Bitcoin ETF options comes at a time when the cryptocurrency market is showing signs of strength. Analysts have projected Bitcoin to reach $65,000 in the near term, citing increased long positions and bullish options activity. This positive market sentiment is further bolstered by the SEC’s recent approval, which is likely to attract more institutional investors to the crypto space.

Moreover, the outcome of the 2024 election could have a significant impact on Bitcoin’s price, according to a Bernstein report. A Trump victory could potentially propel Bitcoin to new heights, reaching $80,000 to $90,000 by the end of Q4, while a Harris win could see Bitcoin retreating to the $30,000 to $40,000 range. The approval of Bitcoin ETF options, therefore, adds another layer of intrigue to the potential impact of the election on the cryptocurrency market.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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