SEC Approves BlackRock Bitcoin ETF for Listing on Nasdaq

CoinWorld reported:
The U.S. Securities and Exchange Commission (SEC) has approved a rule change allowing the Nasdaq International Securities Exchange to list and trade options on the iShares Bitcoin Trust (IBIT), a widely traded exchange-traded fund by BlackRock.
This decision marks another step in expanding the range of derivative products related to Bitcoin, providing investors with additional tools to manage exposure to the world’s largest cryptocurrency.
BlackRock has been seeking approval for such listings since at least March of this year, following the SEC’s approval of several Bitcoin-linked ETFs in the U.S.
The SEC’s approval came after Nasdaq ISE submitted several amendments aimed at addressing concerns about market manipulation and excessive risk in the emerging crypto options market.
Among several requests, the amendments modify rules to allow options linked to U.S. Bitcoin and Ethereum ETFs to be listed, amid concerns regarding market stability.
SEC documents indicate that a key amendment sets the position and exercise limits for IBIT options at 25,000 contracts, which the exchange considers “extremely conservative” given the market size and the trust’s liquidity.
The IBIT options will be settled physically and operate on an American-style basis, providing a hedge for investors looking to manage Bitcoin-related risks.
Since the launch of BlackRock’s Bitcoin price-tracking ETF earlier this year, it has garnered significant attention from both retail and institutional investors, becoming one of the most liquid Bitcoin-related products in the U.S. market.
Despite the approval, the SEC’s action comes amid ongoing concerns about the potential risks associated with cryptocurrency derivatives.
Comments submitted during the review process highlighted worries about market volatility and the broader integration of cryptocurrencies into traditional financial markets. Some urged the SEC to delay approval until the Bitcoin market stabilizes further.
Nevertheless, the SEC determined that the exchange’s surveillance mechanisms, including real-time monitoring and a market surveillance sharing agreement with the Chicago Mercantile Exchange, are sufficient to deter manipulative practices.