Nasdaq Seeks Permission For Bitcoin Index Listing Option

US authorities are being confronted by another permission request from a major US stock exchange to launch and trade options tied to the price of bitcoin (BTC).

Nasdaq in its announcement on Tuesday said it in partnership with CF Benchmarks, “announced its filing with the Securities and Exchange Commission to list and trade Nasdaq Bitcoin Index Options (XBTX).”

If it receives regulatory approval, investors will be able to manage positions and hedge investments in cryptocurrency through options, “furthering the maturity and liquidity of the asset class.”

Bitcoin index

The Nasdaq move comes after the New York Stock Exchange (NYSE) earlier this year announced it was planning to list bitcoin index options.

Both Nasdaq and NYSE are still awaiting approval by the Securities and Exchange Commission, however.

Options are listed derivatives that give the holder the right to buy or sell an asset, such as a stock or exchange-traded product, at a predetermined price by a set date. This provides traders with a cheap way to amplify their purchasing power, while institutional investors use them to hedge risk.

“We are proud to partner with CF Benchmarks for the Nasdaq Bitcoin Index Options, providing market participants with trusted investment avenues for accessing the digital asset ecosystem,” said Greg Ferrari, Vice President and Head of Exchange Business Management at Nasdaq.

“This collaboration further combines the innovative crypto landscape with the resiliency and reliability of traditional securities markets and would mark a significant milestone for expanding the maturation of the digital assets market,” said Ferrari.

Read also : Bitcoin Plummets As Investors Dump Risky Assets

Pending regulatory approval, the index options will track the price of Bitcoin as represented by the CME CF Bitcoin Real-Time Index (BRTI) operated on the Chicago Mercantile Exchange exchange.

Nasdaq said the product is intended to provide institutional and retail market participants access to an important risk management tool.

“CF Benchmarks is delighted to partner with Nasdaq on the launch of options settling to the CME CF Bitcoin Reference Rate – New York Variant (BRRNY), the most liquid and widely recognised BTC price benchmark for the US market,” said Sui Chung, CEO of CF Benchmarks.

Economic fluctuation

Earlier this month a sharp cryptocurrency selloff had brought a sharp end to a crypto rally this year.

Weak economic data in early August, including higher US unemployment and weak manufacturing activity, created fears of a US recession and prompted investors to dump risky assets, including cryptocurrencies.

Bitcoin, the most popular cryptocurrency, briefly plunged below the $50,000 (£39,000) mark, taking it to levels last seen in February, before it recovered slightly.

Bitcoin is currently valued at $59,466.