Nasdaq Pitches Options on Spot Bitcoin ETFs to SEC

By Liz Napolitano

Nasdaq is asking for federal regulators’ permission to offer spot Bitcoin ETF-based options in a bid to expand investors’ exposure to crypto assets. 

Submitted on Tuesday to the U.S. Securities and Exchange Commission, the Nasdaq Bitcoin Index Options (XBTX) would offer investors the ability to manage positions and hedge Bitcoin investments through options, Nasdaq said. The offering could bolster the adoption crypto assets, according to the U.S.-based stock exchange. 

CF Benchmarks will manage the index that underpins XBTX.

“This collaboration further combines the innovative crypto landscape with the resiliency and reliability of traditional securities markets and would mark a significant milestone for expanding the maturation of the digital assets market,” Nasdaq Vice President and Head of Exchange Business Management Greg Ferrari said Tuesday in a statement. 

Options are contracts that enable investors to trade a particular asset for a predetermined price on a fixed date in the future. Investors take advantage of options to hedge their investment risks. 

Earlier this month, Nasdaq separately proposed to offer options based on BlackRock’s spot Ethereum ETF.

Options based on exchange-traded funds that track the price of Bitcoin or Ethereum are not yet available in the U.S.

The SEC has punted on several requests by BlackRock and other institutional players to launch options based on spot Bitcoin ETFs since the funds received regulatory approval in January.

Some U.S. lawmakers are pressuring federal regulators to approve the investment offerings, however. In May, Axios reported that U.S. congressmen Mike Flood and Wiley Nickel sent a letter to the SEC pressuring the agency to approve options trading on the Bitcoin-based funds.

Edited by Ryan Ozawa.

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