- SEC approved Nasdaq’s cash-settled Bitcoin index options, while CFTC clearance remains.
- QBTC options give Bitcoin price exposure without direct ownership or physical delivery.
- SEC cited shared CFTC oversight as crypto policy shifts under new Chairman Paul Atkins.
The SEC has cleared Nasdaq’s request to launch cash-settled Bitcoin index options on the Philadelphia Stock Exchange. The product offers regulated exposure to Bitcoin price movements, but it still needs approval from the CFTC before trading could begin.
The European-style contracts are linked to the Nasdaq Bitcoin Index. The benchmark is based on the CME CF Bitcoin Real Time Index divided by 100.
Nasdaq Bitcoin Options Await CFTC Clearance
The index updates every 200 milliseconds. It uses price data from major cryptocurrency exchanges. However, the SEC granted approval on an accelerated basis.
The new options are cash-settled, so no physical Bitcoin changes hands. At expiration, holders receive the difference between Bitcoin’s spot price and the strike price.
The European-style structure also removes early assignment risk, as the contracts could only be exercised at expiration. This makes the product different from options tied to spot Bitcoin ETFs.
The contracts give traders exposure to Bitcoin price movements without direct ownership of the asset. They are set to trade on Phlx under the ticker QBTC, with a minimum price increment of $0.01.
The SEC also approved a position limit of 24,000 contracts per side. The agency said that equals about 0.12% of Bitcoin’s outstanding supply.
However, the approval does not allow trading to start immediately. The Commodity Futures Trading Commission must first grant exemptive relief.
Bitcoin is treated as a commodity under CFTC oversight. That means the product falls into an area involving both regulators. CME Group raised this issue in a comment letter last October. The exchange operator has offered Bitcoin futures options since 2020.
SEC Defines CFTC Role in Bitcoin Options
CME argued that the contracts fall under the CFTC’s exclusive jurisdiction. The SEC addressed that concern in its order. The agency said Section 717 of the Dodd-Frank Act is not limited to novel derivative products. It also said shared oversight could apply when the CFTC grants exemptive relief.
The SEC wrote that shared jurisdiction with the CFTC is not new. It cited mixed swaps and security futures as existing examples. The approval comes as the SEC takes a more open approach to crypto under Chairman Paul Atkins. He has called for clearer rules for digital asset firms.
Arkins has also moved to drop several major crypto enforcement cases started under the previous administration. His position has focused on regulation that supports innovation while setting clearer limits.
The agency is also preparing an “innovation exemption.” That plan would allow blockchain-based tokenized trading of public company shares on decentralized crypto platforms.
The exemption could apply even without consent from the companies being tracked. That proposal marks another shift in how the SEC is approaching blockchain-based markets.
Related: Bitcoin Faces Fresh Selling as ARMA Bill Lacks 1 Million BTC Mandate
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