Spot Bitcoin ETF Options Clear Key Hurdles, Paving the Way for Institutional Adoption

Spot Bitcoin ETF options are traditional financial instruments that grant holders the right, but not the obligation, to buy or sell shares of crypto ETFs.

A major regulatory milestone was reached on November 16 when the Commodity Futures Trading Commission (CFTC) announced that it will no longer oversee the clearing process for Bitcoin ETF options, paving the way for the final step in the approval chain.

With this development, attention now turns to the Options Clearing Corporation, which must finalize the listing process for these ETF options.

According to a recent X post by ETF analyst Eric Balchunas:

“Ball now in OCC’s court, and they are into it, so they’ll prob list very soon.”

The CFTC’s statement on November 16 clarified that the Division of Clearing and Risk (DCR) no longer has oversight over the clearing of these options, and the Options Clearing Corporation is the sole entity mandated to clear and settle these ETF options.

The SEC approved an application to list these options on the NYSE and CBOE, highlighting that the green light was granted because the SEC recently permitted the Nasdaq to list options on the iShares Bitcoin Trust (IBIT), which saw positive results.

This recent announcement marks the second major regulatory hurdle cleared in the approval process for spot Bitcoin ETF options.

Market analysts are viewing this as a significant step forward, with the potential listing of these options expected to pave the way for institutional investors to enter the crypto market en masse, helping to legitimize and expand the growing digital asset market.

According to Jeff Park, Head of Alpha Strategies at Bitwise Invest, Bitcoin ETF options could hit the market sooner than expected.

With the CFTC’s clearance and the Options Clearing Corporation (OCC) next in line, Park believes that “Bitcoin ETF options are coming sooner than you think.”

While he expects the OCC to act “very quickly,” he noted that the end of 2024 is an “optimistic” target, and approval by year-end is not guaranteed.

Bitcoin commentator British Hodl told their 76,000 X followers, “Q1 is his estimated time for the option’s arrival.”

Some have even begun speculating on the arrival of similar spot Ethereum ETF options.

One user on X, going by the name Austin, asked, “Wonder how long ETH will follow? Can they not just resubmit since it was recently denied prior to Trump winning?”

Just recently, the Securities and Exchanges Commission stated that it will be delaying the approval of spot Ethereum ETF applications to allow for more public commentary and expert advice.

The commission highlighted that it needs to ensure that the transition aligns with current securities laws.