SEC approves NYSE and CBOE listings for Bitcoin options ETFs

On October 18, the U.S. Securities and Exchange Commission (SEC) approved the listing of Bitcoin (CRYPTO:BTC) options exchange-traded funds (ETFs) on the New York Stock Exchange (NYSE) and Chicago Board Options Exchange (CBOE).

This decision allows options trading for 11 approved Bitcoin (CRYPTO:BTC) ETF providers, including Fidelity, ARK21Shares, and BlackRock’s iShares Bitcoin Trust.

The approval brings Bitcoin ETF options in line with other commodity-based ETFs, potentially increasing liquidity in the Bitcoin market.

According to Jeff Park of Bitwise, the approval marks a significant upgrade from existing platforms like LedgerX and Deribit, which lack central guarantors.

He highlighted the potential for short squeezes, stating, "Saying you can't short squeeze a trillion-dollar asset is like saying you can't make an elephant dance. Sure, it's huge, but if you tie enough ropes to its legs and pull hard enough, even the biggest creature can be moved in ways it doesn't want."

Park’s comment emphasises how overleveraged traders may be forced to buy Bitcoin to cover their positions, driving up its price.

Additionally, Tom Dunleavy, managing partner at MV Global, remarked that the introduction of Bitcoin options could help mitigate volatility.

"The introduction of options acts as a mechanism to dampen the high volatility of Bitcoin and smooth out markets over time," Dunleavy explained.

With the SEC’s approval, investors expect the influx of liquidity to stabilise Bitcoin's price movements and fuel market growth.

At the time of writing, the Bitcoin (BTC) price was $68,166.67.