As Bitcoin approaches $100,000, Cboe Global Markets plans to launch cash-settled index options tied to the price of spot Bitcoin. Starting December 2, the exchange will introduce the Cboe Bitcoin US ETF Index (CBTX) to offer a new way to access Bitcoin exposure through options.
According to the official announcement, this offering has the potential to promote wider participation in digital assets by allowing both institutional and retail investors to engage with Bitcoin's price movements.
Crypto Investment Tools
Cboe's new Bitcoin ETF index options track the performance of a basket of spot Bitcoin ETFs listed on US exchanges. The index uses a modified market cap-weighted structure, ensuring that it closely tracks the spot Bitcoin price while eliminating the complexities associated with physically settling Bitcoin itself.
Instead, the options are cash-settled, meaning they can be closed out in cash when the contract expires. This reportedly eliminates the need to deliver actual Bitcoin ETFs, a key consideration for many investors.
Commenting about the new offering, Rob Hocking, the Global Head of Product Innovation at Cboe, said: "Our new suite of options on the Cboe Bitcoin US ETF Index offers a timely and compelling solution for traders to efficiently gain exposure to spot Bitcoin."
"We expect the unique benefits of cash-settlement, combined with the availability of various index sizes and FLEX options, will give customers more flexibility in their trading strategies."
These options give traders a novel means of gaining exposure to Bitcoin’s volatile price movements without the risks that come with directly holding the asset. Additionally, they provide a valuable tool for hedging, allowing investors to manage risks associated with Bitcoin price fluctuations.
Based on @dpuellARK’s on-chain analytics and analysis, the bull market in bitcoin is in good shape. After its halving in April, growth in the supply of bitcoin dropped to 0.9%, below the long term growth in the supply of gold for the first time! https://t.co/RHi21HKukV
— Cathie Wood (@CathieDWood) November 15, 2024
Cboe will launch a range of options, including standard-sized and mini-Bitcoin ETF index options. The mini options will be one-tenth the size of the standard contracts, offering smaller traders the opportunity to manage risk, the exchange mentioned.
A Platform for Digital Assets
Cboe’s new offering is part of the company’s broader initiative to expand its digital asset derivatives platform. The exchange already lists cash-settled Bitcoin and Ether margin futures. According to the company, the new options allow investors to take advantage of Bitcoin's price movements without the complexities of directly holding cryptocurrencies.
In 2025, subject to regulatory approval, Cboe plans to transition its digital asset futures products to its Cboe Futures Exchange. This move is expected to further integrate its services into the rapidly expanding digital assets market.
This article was written by Jared Kirui at www.financemagnates.com.
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