Nasdaq Seeks SEC Approval to Launch Bitcoin Index Options

Nasdaq, a global stock exchange, has filed with the United States Securities Exchange Commission (SEC) to list and trade Bitcoin Index Options (XBTX). In a press release, the exchange announced that this initiative is in collaboration with CF Benchmark, a benchmark administrator regulated by the United Kingdom’s Financial Conduct Authority (FCA).

If the SEC grants approval, these Bitcoin index options will offer investors a new way to gain exposure to Bitcoin. The options products will track Bitcoin’s price performance using the Chicago Mercantile Exchange’s (CME) CF Bitcoin Real-Time Index (BRT).

Operation of Nasdaq’s Bitcoin Index Options (XBTX)

The Nasdaq filing comes even as the SEC remains cautious about approving options for Bitcoin spot ETFs. The Chicago Board Options Exchange (CBOE), New York Stock Exchange (NYSE), and Nasdaq have all submitted applications to list options for nine Bitcoin spot ETFs, but none have made significant progress with the regulator.

The XBTX product will operate as a typical index option, providing traders with cash settlements. It will use a European-style exercise, meaning investors can only exercise their options at expiration. The final settlement value for the XBTX product will be based on the CME CF Bitcoin Reference Rate-New York Variant (BRRNY) divided by 100. Additionally, XBTX will align with the Bitcoin futures and options contracts CME offers.

Bitcoin Index Options to Boost BTC Adoption

Sui Chung, CEO of CF Benchmarks, highlighted that the index options would broaden investors’ opportunities to gain exposure to the largest cryptocurrency. He also noted that, similar to Bitcoin spot ETFs, the index options could draw more institutional investors to Bitcoin and improve overall market liquidity.

Bitcoin spot ETFs quickly gained traction upon their launch, attracting institutional investors and generating trading volumes exceeding $4 billion on their first day. These ETFs have seen a cumulative net inflow of over $18 billion to date.

With the introduction of index options, investors can further diversify their Bitcoin exposure and capitalize on the cryptocurrency’s growing popularity.

Meanwhile, Bitcoin experienced a 2% decline on Tuesday, trading at $62,000 at the time of writing.