Options on Bitcoin exchange-traded funds (ETFs) are anticipated to debut in the United States by early 2025, according to James Seyffart, an analyst with Bloomberg Intelligence. Speaking at the Permissionless conference on October 9, Seyffart indicated that while a launch before the end of 2024 is possible, the first quarter of 2025 represents a more realistic timeframe for these complex financial instruments.
Recent developments have paved the way for Bitcoin ETF options, particularly after the Securities and Exchange Commission (SEC) permitted Nasdaq to list options linked to BlackRock’s iShares Bitcoin Trust, known as IBIT, in September.
However, final approvals from the Commodity Futures Trading Commission (CFTC) and the Options Clearing Corporation (OCC) are still pending. Seyffart noted that, unlike the SEC, both the CFTC and OCC do not operate under strict deadlines, suggesting that the approval process could extend further.
Options contracts grant investors the right to buy or sell an underlying asset at a specified price, marking Bitcoin ETF options as some of the first regulated cryptocurrency options listed on U.S. exchanges. Their introduction is particularly significant due to the OCC’s mission to reduce counterparty risk in the markets.
These financial instruments are not limited to cryptocurrency markets; financial advisers, who manage about half of the investment flows into the $9 trillion ETF sector, frequently use options to hedge against market volatility. A survey by The Journal of Financial Planning revealed that over 10% of advisers actively incorporate options in their client portfolio management strategies as of 2023.
Seyffart emphasized that the availability of Bitcoin ETF options could significantly enhance mainstream market adoption. He remarked that utilizing options on ETFs may help advisers become more comfortable with the cryptocurrency space, especially as volatility and downward price movements remain key concerns for potential institutional Bitcoin investors. Options are recognized as an effective tool for managing these risks.
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