As a seasoned investor in the crypto market, I’m keeping a close eye on the latest developments regarding Bitcoin options on exchange-traded products (ETPs) by the United States Securities and Exchange Commission (SEC). Having witnessed the volatility and dynamic nature of the digital asset class, I believe that this move could potentially bring more liquidity and efficiency to the market.
I’ve observed that once again, the U.S. Securities and Exchange Commission (SEC) has initiated consultations regarding a potential rule modification concerning Bitcoin exchange-traded products (ETPs) and their associated options trading.
Based on a filing made on April 24, the securities regulatory authority is seeking clarification on how trading Bitcoin (BTC) options could influence the broader market, particularly under distress conditions. A key aspect of this investigation will involve evaluating whether existing monitoring and disciplinary measures at exchanges are sufficient to manage the distinct characteristics of Bitcoin options.
Twenty-one days following the document’s registration is the deadline for submitting initial comments. Consequently, final comments are due by May 15, 2024. Similarly, rebuttal comments can be submitted up until May 29, 2024.
Bitcoin options represent contracts that allow purchasers to have the choice, without being forced, to buy or sell Bitcoins at a predetermined price before a certain expiration date. These financial instruments are commonly utilized by experienced traders who possess a strong understanding of option valuation and market trends. As with other investments, Bitcoin options trading entails risks that might not align with the risk tolerance of all investors.
Previously, the Commission invited opinions on proposed rule adjustments and took into account the submitted feedback in their subsequent submission. A significant number of responses emphasized that introducing options for Bitcoin Exchange-Traded Products (ETPs) would enhance market liquidity and effectiveness.
“In addition, the commenter stated that approving the listing and trading of options on spot Bitcoin ETPs “would further bring Bitcoin into the regulatory perimeter by allowing additional regulated market participants such as CFTC-regulated designated contract merchants and SEC-regulated broker-dealers to trade the products.” “
Financial companies such as Nasdaq and Cboe have put forth proposals to the SEC aiming to obtain approval for Bitcoin options trading. Nasdaq’s proposal involves listing and facilitating trades for options based on BlackRock’s iShares Bitcoin Trust. In contrast, Cboe plans to provide options trading opportunities for various Exchange-Traded Products (ETPs) that contain Bitcoin as a key component.
Furthermore, organizations such as Bitwise and Grayscale are pursuing regulatory consent to offer Bitcoin ETF options on the New York Stock Exchange.
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2024-04-25 19:56