SEC Approves Bitcoin ETF Options for Nasdaq ISE, Sparking Debate Over Market Stability

As the range of products tied to Bitcoin continues to expand, the approval by the U.S. Securities and Exchange Commission (SEC) is set to offer new opportunities for investors looking to capitalize on Bitcoin-related investments. The SEC has approved a regulatory amendment that now allows the Nasdaq International Securities Exchange (Nasdaq ISE) to list and trade options on IBIT (iShares Bitcoin Trust), BlackRock’s popular exchange-traded fund (ETF).

This approval follows several submissions by Nasdaq ISE, aimed at revising regulations to better manage market manipulation and mitigate the high risks involved in cryptocurrency options trading. The SEC’s decision comes after it had already opened the door for Bitcoin-linked ETFs, enabling institutions like BlackRock to seek listing for such funds—a move the company has been pursuing since early 2024.

Nasdaq ISE’s submissions specifically targeted regulatory barriers that have restricted the listing of options tied to Bitcoin (BTC) and Ethereum (ETH). These restrictions have largely stemmed from concerns about market volatility and instability.

The IBIT options will employ physical settlement procedures and will be exercised in an American style. These features are designed to help manage the risks associated with Bitcoin and its derivatives. BlackRock’s ETF is expected to attract even more interest from a wide range of investors, from small retail traders to large institutions—a trend that has accelerated since the ETF’s launch. IBIT has become one of the most trusted and liquid Bitcoin-linked funds in the United States.

However, not everyone is optimistic about the SEC’s approval of option listings. Critics have raised concerns about the inherent instability of the options market and the potential disruptions caused by integrating cryptocurrencies into traditional financial systems. While some have urged the SEC to delay approvals until the Bitcoin market becomes more stable, the agency has expressed confidence in BlackRock’s surveillance and operational mechanisms, deeming them sufficient for approval.