Cboe Global Markets Inc. announced on Friday that it will launch the first cash-settled index options tied to the spot price of Bitcoin, marking a significant milestone in the integration of cryptocurrency-related securities into traditional exchanges. The new options are set to debut on December 2 and will be based on the Cboe Bitcoin U.S. ETF Index, which tracks a weighted basket of spot Bitcoin exchange-traded funds (ETFs) listed in the United States.

This move follows the recent launch of similar options on Nasdaq, which have already garnered substantial trading volume as U.S. investors seek new ways to hedge or speculate on Bitcoin’s price movements. Previously, cryptocurrency derivatives such as options and futures were primarily traded on offshore platforms like Binance and Deribit due to regulatory hurdles within the United States.

The introduction of cash-settled Bitcoin ETF options reflects increasing demand for crypto derivatives among institutional investors. Rob Hocking, Cboe’s global head of product innovation, stated, “Our new suite of options on the Cboe Bitcoin U.S. ETF Index offers a timely and compelling solution for traders to efficiently gain exposure to spot Bitcoin.” He emphasized the advantages of cash-settlement, the availability of various index sizes, and FLEX options, which aim to provide flexibility in trading strategies.

The Cboe Bitcoin U.S. ETF Index is designed to closely mirror Bitcoin’s spot price by aggregating data from multiple spot Bitcoin ETFs. In addition to the standard options, Cboe will also launch smaller contracts tied to a mini version of the index, representing one-tenth the notional value of the full-sized contracts.

The announcement comes amid surging interest in cryptocurrency trading on U.S. platforms. President-elect Donald Trump’s pro-crypto policies and growing institutional adoption have contributed to this shift, as major players like CME and Cboe expand their offerings to capture market share previously dominated by offshore exchanges.

Bitcoin’s price reacted positively to the news, reversing earlier declines to trade up 0.2% at approximately $98,500 on Friday. The launch of similar contracts tied to the iShares Bitcoin Trust ETF earlier this week witnessed high trading activity, with traders favoring bullish call options. This momentum underscores the rising popularity of Bitcoin-related derivatives among investors.

As the cryptocurrency market continues to mature, the launch of these cash-settled Bitcoin ETF options could pave the way for greater institutional participation. By providing regulated avenues for trading, U.S. exchanges like Cboe and Nasdaq are positioning themselves as key players in the burgeoning crypto derivatives market. Analysts believe these developments will enhance market liquidity and foster broader acceptance of digital assets within traditional finance.

The addition of Cboe’s Bitcoin ETF options also signals a shift toward integrating cryptocurrencies into mainstream financial instruments, potentially driving further adoption and innovation in the space. Whether this momentum sustains or faces regulatory challenges will depend on how market participants and policymakers adapt to this evolving financial landscape.

Bloomberg Article