Nasdaq Proposes Bitcoin Index Options Based on the CME CF Bitcoin Real Time Index

These cash-settled options are set to revolutionize how both retail and institutional investors access Bitcoin.

Nasdaq is planning to introduce Bitcoin Index Options on the Nasdaq PHLX exchange, according to a new filing with the Securities and Exchange Commission (SEC) on March 21. These options will be cash-settled and will provide both retail and institutional investors with a way to gain exposure to Bitcoin without having to directly hold the digital asset.

The Nasdaq Bitcoin Index Options will be based on the CME CF Bitcoin Real Time Index (BRTI), which aggregates Bitcoin trading data from various major exchanges. This index is regulated under the UK’s Financial Conduct Authority (FCA) as part of the EU’s Benchmark Regulation. The options will allow investors to trade Bitcoin without the need to hold physical Bitcoin, offering an efficient way to speculate on Bitcoin’s price.

Moreover, these options will be cash-settled, with the final settlement value based on the CME CF Bitcoin Reference Rate New York Variant (BRRNY). BRRNY reflects the closing prices of Bitcoin in USD from major exchanges and will be published daily at 4:00 PM New York time. Nasdaq expects this new product to attract investors seeking a secure and regulated instrument to trade Bitcoin price movements.

Phlx aims to implement this new product in a manner that aligns with existing index options listed on the exchange. Phlx also proposes rules that would govern the trading of Nasdaq Bitcoin Index Options such as trading hours, settlement, and position limits. The proposal highlights that the Nasdaq Bitcoin Index Options will use a minimum price increment of $0.01 and will have a $100 multiplier for settlement.

The exchange’s decision to introduce this product is part of an ongoing effort to expand its offerings in cryptocurrency-related financial instruments. This move comes after previous regulatory approvals for other cryptocurrency-based products, such as Bitcoin futures and exchange-traded products (ETPs). The Nasdaq Bitcoin Index Options are designed to complement these products and offer an alternative exposure to Bitcoin without the need for direct ownership.

The SEC is yet to provide a final approval but has opened a public participation period for the proposed rule change. Interested parties can submit feedback on the proposal before a final decision is made. If approved, this new option would represent a major step forward in the mainstream adoption of cryptocurrency-based financial products within regulated markets.