Nasdaq just applied to list and trade Bitcoin Index Options with the U.S. Securities and Exchange Commission.
The press release states that these options will track the price of Bitcoin as the CME CF Bitcoin Real-Time Index represents it. The cryptocurrency market could experience greater dependability and transparency with these choices.
With regulatory permission pending, this approach would improve investor control and position hedging for cryptocurrency, increasing the class’s liquidity and maturity.
The options will feature European-style exercise and cash settlement, with final settlement values determined by the CME CF Bitcoin Reference Rate — New York Variant. This means the options are settled in cash, not Bitcoin.
This benchmark provides a clear reference rate that will be pegged to a specific time, crucial in a market like crypto, characterized by continuous global trading.
If authorized, the Nasdaq Bitcoin Index Options will supplement current Bitcoin-related futures and options contracts by providing institutional and retail investors with an additional risk management tool.
The proposed index options are a cost-effective way to magnify exposure to Bitcoin, giving institutional investors and traders an alternative method to hedge their exposure to the world’s largest cryptocurrency.
Similarly, other big financial institutions filed for their spot Bitcoin ETFs after the SEC authorized spot Bitcoin ETF trading early this year. Nasdaq and CF Benchmarks are collaborating to make this feasible.
