The CFTC approves BTC ETF options listing and trading, leaving only the OCC to approve. The SEC had approved this in October as the first action in this chain of events.
The Commodities Futures Trading Commission (CFTC) has approved the Bitcoin (BTC) exchange-traded fund (ETF) Options to trade in the United States, marking the second hurdle cleared in getting these instruments up for retail and institutional access. The next step would involve the Options Clearing Commission (OCC) approving their listing and trading.
“The CFTC just dropped a notice clearing the way for spot bitcoin ETF options to be listed,” said Eric Balchunas, ETF analyst at Bloomberg, on X. “This is the second hurdle they needed to clear after the SEC. Ball now in OCC’s court and they are into it, so they’ll prob list very soon.” James Seyffart, another Bloomberg analyst, added to Balchunas’ post, “Here. We. Go.”
In a release issued by the CFTC, the agency mentioned that its Division of Clear and Risk (DCR) has nothing more to do with these instruments than giving this much-awaited approval. It iterated that the responsibility now falls on the OCC and the SEC as the options would trade as securities on SEC-regulated national exchanges with the clearing guarantee provided by the OCC.
“DCR’s position is the listing of these shares on SEC-registered national securities exchanges does not implicate the CFTC’s jurisdiction, and therefore, the clearing of these options by OCC would be undertaken in its capacity as a registered clearing agency subject to SEC oversight,” the release read. “Accordingly, it is DCR’s position that the CFTC does not have any more role regarding the clearing of these options on the part of OCC than with regard to OCC’s clearing of any security.”
The OCC eliminates counterparty risk as it ensures options are traded even if counterparties of transactions do not want to stick to their end of the deal. That is expected to bring tremendous attention to BTC.
BTC ETF Options Could Bring New Price Action for BTC
Derive founder Nick Forster highlighted how institutional action in the options market can kickstart a new epoch for an asset like BTC. “SoftBank literally pumped the Nasdaq in 2020/2021 by yeeting options in multiple multi-hundred-billion dollar names,” his X post read. “When someone tries to do that with fixed supply BTC… look out.”
Regarding the timeline for the OCC to approve the trading of BTC ETF options, Jeff Park, Bitwise Invest’s Head of Strategies, said they would be here “sooner than you think.” However, he feels that would occur sometime next year and not by 2024 end.
