SEC Greenlights Trading Options For BlackRock's Bitcoin ETF

In another boost for cryptos apart from the Fed, the US Securities and Exchange Commission (SEC) has approved Nasdaq's application to list options on BlackRock's iShares Bitcoin Trust ETF, an essential step towards starting trading in derivatives linked to the ETF.

The contracts must still be authorised by Options Clearing and the Commodity Futures Trading Commission before trading commences.

The iShares fund and other exchange-traded funds (ETFs) that focus on spot Bitcoin have received applications from other exchanges to list options.

Listing options, made possible by the SEC's approval, have the potential to greatly benefit ETF liquidity by drawing in more and bigger investors.

The largest exchange-traded fund that invests directly in Bitcoin is the one that trades under the ticker IBIT.

Since the SEC legalised it and similar products in January after a protracted legal struggle by crypto fund issuer Greyscale Investments, it has amassed over $22.7 billion in assets.

The SEC approval was seen as a hurdle for Bitcoin ETF's next steps.

Wall Street is now bracing for the next phase of digital assets and options as the first bitcoin exchange-traded funds start trading.

Professional investors and even more savvy ordinary investors are turning to derivatives as a means to speculate on future gains or protect themselves from losses.