Bitcoin Trading Enters New Era With SEC-Approved Nasdaq Index Options
Trading within the new Bitcoin index choices is not going to start straight away. The SEC approval doesn’t mechanically open the door — the Commodity Futures Trading Commission should nonetheless grant its personal exemptive aid earlier than any contracts change arms on the change, as a result of Bitcoin is assessed as a commodity and falls beneath the CFTC’s jurisdiction.
The SEC approved Nasdaq’s proposal to checklist the choices on the Philadelphia Stock Exchange, referred to as Phlx, on an accelerated foundation, with the choice revealed Friday on the company’s web site.
A Different Kind Of Bitcoin Contract
The contracts are European-style and cash-settled, which means consumers obtain the distinction between the Bitcoin spot worth and the strike worth at expiration — no precise Bitcoin adjustments arms.
That construction additionally removes the chance of early project, which units these aside from choices tied to identify Bitcoin ETFs which were accessible to traders.
Source: SEC
The contracts will commerce beneath the ticker QBTC, with a minimal worth increment of 1 cent and a place restrict of 24,000 contracts per aspect, which works out to roughly 0.12% of Bitcoin’s complete excellent supply.
They are tied to the Nasdaq Bitcoin Index, a benchmark that tracks one one-hundredth of the CME CF BTC Real Time Index, which pulls pricing knowledge from main cryptocurrency exchanges each 200 milliseconds.
CME Group filed a remark letter final October arguing the brand new contracts fall beneath the CFTC’s unique authority. The SEC pushed again, writing in its order that shared jurisdiction between the 2 regulators isn’t new, citing combined swaps and safety futures as present examples, and referencing Section 717 of the Dodd-Frank Act because the authorized foundation for concurrent oversight.
A Shift In Tone At The SEC
The approval matches a broader shift underway on the SEC beneath Chairman Paul Atkins. The company has moved to drop a number of enforcement instances in opposition to crypto companies that have been launched beneath the earlier administration, and Atkins has known as publicly for clearer guidelines that assist innovation.
Reports point out the SEC can also be getting ready what it calls an innovation exemption that may permit tokenized buying and selling of public firm shares on decentralized crypto platforms, even with out consent from the businesses concerned.
The Philadelphia Stock Exchange will host the brand new QBTC contracts as soon as each regulators have signed off, marking one other step in Wall Street’s rising embrace of Bitcoin-linked monetary merchandise.
Featured picture from Unsplash, chart from TradingView