SEC Greenlights Options on BlackRock’s IBIT

Approval of options on BlackRock's spot bitcoin ETF may pave the way for similar funds.

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DJ
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Finance Reporter
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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

The Securities and Exchange Commission approved options trading for BlackRock’s iShares Bitcoin Trust (IBIT) last week, expanding choices for investing in bitcoin-related products in U.S. financial markets.

According to a recent notice, Nasdaq ISE will list the new options contracts, the first for a spot bitcoin ETF. An option is a financial instrument that gives its owner an option to buy or sell an underlying asset, which in this case would be shares of $22.7 billion IBIT, the largest spot bitcoin ETF, which were approved for trading in January.

While spot bitcoin ETFs have attracted billions in inflows, options may draw in more investors, analysts said.

“Huge win for the bitcoin ETFs (as it will attract more liquidity which will in turn attract more big fish),” Eric Balchunas, senior ETF analyst for Bloomberg, said in an X post

Further approvals are needed before the funds list officially, he wrote. “This is just one stage of approval, the OCC [Office of the Comptroller of the Currency] and CFTC [Commodity Futures Trading Commission] has to approve as well before they officially list,” he explained. “The other two don't have a 'clock' so not sure when they'll be approved. A big step tho nonetheless that the SEC came around.”

Bitcoin Options Expansion

To address potential market manipulation, Nasdaq ISE outlined plans to implement surveillance procedures, including using existing options monitoring systems and collaborating with other exchanges.

/ibit

The exchange set a conservative position limit for IBIT options compared to bitcoin futures. While CME bitcoin futures have a 2,000 contract limit, the 25,000 contract limit for IBIT options represents a much smaller position in terms of equivalent bitcoin exposure.

According to data from U.K.-based asset manager Farside Investors, IBIT saw an inflow of $15.8 million in inflows since Sept. 9, contributing to its total year-to-date inflows of $20.9 billion. This maintains IBIT’s position as the largest spot bitcoin ETF by assets.

IBIT had more than 611 million shares outstanding as of Aug. 12, the filing stated. It also reported IBIT’s market capitalization at nearly $20 billion, with average daily trading volume exceeding 26 million shares in the three months before Aug. 7.

A graduate of The University of Texas, Arlington with a BA in Communications, DJ has covered retirement plans, mortgage news, and financial advisor trends. His background includes producing daily content, managing newsletters, and engaging with industry experts. DJ is excited to contribute to ETF coverage and learn more about the $10-trillion-dollar ETF industry. Outside of work, he enjoys exploring New York City's food scene, anime, and video games.