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Key findings
- Nasdaq plans to launch Bitcoin index options, subject to SEC approval.
- The options are based on the CME CF Bitcoin Real-Time Index.
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Nasdaq has filed an application with the SEC to list and trade Bitcoin index options, providing institutions and traders with a new way to hedge their Bitcoin exposure.
The proposed Bitcoin Index Options (XBTX) would be based on the CME CF Bitcoin Real-Time Index (BRTI) developed by CF Benchmarks. This index tracks Bitcoin futures and options contracts on the CME Group exchange platform and provides real-time price data for the cryptocurrency.
The options proposed by Nasdaq would involve a European-style exercise and cash settlement, with the final settlement value based on the CME CF Bitcoin Reference Rate New York Variant (BRRNY), which is calculated every second by aggregating Bitcoin-to-USD order data from leading crypto exchanges.
If approved, these Bitcoin options would be the first crypto derivatives to be cleared by the US Options Clearing Corporation (OCC). Greg Ferrari, Vice President and Head of Exchange Business Management at Nasdaq, emphasized the importance of this development, stating:
“This collaboration combines the innovative crypto landscape with the resilience and reliability of traditional securities markets and would be an important milestone in the further maturation of the digital asset market.”
The move comes as Bitcoin investment products are seeing increasing interest. BlackRock’s spot Bitcoin ETF recently recorded its largest daily net inflow in 35 days on August 26 at $224.1 million. This event contributed to a daily net inflow of $202.6 million across all 11 U.S. spot Bitcoin ETFs. In addition, crypto investment products recorded their largest inflows in five weeks at $533 million from August 18 to 24, according to data from CoinShares.
The launch of Bitcoin index options could provide institutional investors and traders with a new tool to manage their respective crypto exposure. Sui Chung, CEO of CF Benchmarks, noted that these options would complement CME’s existing futures and options contracts, as well as spot Bitcoin ETF trading.
“Together, these regulated crypto derivatives will give investors the confidence to find more differentiated ways to participate in the largest digital asset,” Chung adds.
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