Options on Bitcoin (BTC) exchange-traded funds (ETFs) are likely to launch in the United States by the first quarter of 2025, according to James Seyffart, a Bloomberg Intelligence analyst.
“I think before the end of the year is possible for options, but more likely in Q1 2025,” Seyffart said during an Oct. 9 panel discussion at the Permissionless conference.
In September, the US Securities and Exchange Commission (SEC) authorized Nasdaq to list options tied to BlackRock’s Bitcoin ETF, iShares Bitcoin Trust (IBIT).
They are awaiting final signoffs from the Commodity Futures Trading Commission (CFTC) and Options Clearing Corporation (OCC).
“Unlike SEC rules, the CFTC and OCC don’t have strict deadlines, so they could delay it further if they wanted,” Seyffart said.
The SEC approved spot BTC ETF options on Sept. 20. Source: Eric Balchunas
Related: Investment managers eye ‘extraordinary upside’ from BTC options debut
Options are contracts granting the right to buy or sell — “call” or “put” in trader parlance — an underlying asset at a certain price. In the US, if one party fails to uphold the agreement, the OCC intervenes and settles the trade.
Listing spot BTC options on regulated US exchanges — where the OCC safeguards traders against counterparty risk — marks a “monumental advancement” in cryptocurrency markets and creates “extremely compelling opportunities” for investors,” Jeff Park, Bitwise Invest’s head of alpha strategies, said in a Sept. 20 X post.
“For the first time, Bitcoin will have a regulated market where the OCC protects clearing members from counterparty risks,” Park said. “This means Bitcoin’s synthetic notional exposure can grow exponentially without the [default] risks that have kept investors at bay.”
Financial advisers, who control as much as half of investment flows in the $9 trillion ETF market, rely on options to safeguard against sharp market movements. More than 10% of advisers actively used options to manage client portfolios as of 2023, according to a survey by The Journal of Financial Planning.
Bloomberg Intelligence analyst James Seyffart participates in a panel discussion at Permissionless. Source: Cointelegraph
“Writing options on ETFs could help advisers get more comfortable with the space,” Seyffart said. “The biggest concern with Bitcoin for many is volatility, especially downward volatility. Options can help people manage their risk better.”
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