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⚡Options Trading for Bitcoin ETFs Approved✅

Croxroad

21 Oct 2024 — 4 min read

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🚛 SEC's Rule Changes

The U.S. Securities and Exchange Commission (SEC) has approved significant stock exchange rule changes, allowing the listing of options tied to spot Bitcoin exchange-traded funds (ETFs). This move is expected to expand the investment ecosystem surrounding Bitcoin products, which have already attracted billions in inflows this year.

In two memos released on Friday, the SEC confirmed that the New York Stock Exchange (NYSE) will be permitted to list and trade options on the Grayscale Bitcoin Trust (GBTC), the Grayscale Bitcoin Mini Trust (BTC), and the Bitwise Bitcoin ETF (BITB). Additionally, Cboe Global Markets received approval to list options for the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB). This decision follows the SEC's prior approval of Nasdaq's rule proposal to allow options trading on BlackRock's iShares Bitcoin Trust (IBIT).

Options are financial derivatives that provide investors the right, but not the obligation, to buy or sell an underlying asset—here, Bitcoin ETFs—at a predetermined price before or on a specified date. Many analysts believe that introducing options trading on Bitcoin ETFs will enhance institutional interest in the cryptocurrency space and boost overall market liquidity.

The SEC's approval for NYSE highlights the anticipated benefits of these options, noting that they "would permit hedging, allow for more liquidity, better price efficiency, and less volatility concerning the underlying funds." Furthermore, the SEC believes that these developments will contribute to greater transparency and efficiency in the markets for these and related products. As a result, this regulatory approval is seen as a pivotal step in the maturation of the Bitcoin investment landscape, potentially leading to increased participation from institutional investors.

🚓 SEC Hack Investigation

Eric Council Jr., a 25-year-old from Athens, Georgia, has been arrested in connection with a hack of the U.S. Securities and Exchange Commission's (SEC) social media account on X (formerly Twitter). Court documents reveal that Council searched phrases such as "how can I know for sure if I am being investigated by the FBI" and "signs that you are under investigation by law enforcement," suggesting awareness of potential legal trouble.

He is accused of being part of a group that hacked the SEC's X account in January, posting false information about Bitcoin that led to a significant price surge. The misleading post claimed that the SEC had approved Bitcoin for inclusion in mainstream investment funds, causing the cryptocurrency's value to increase by approximately $1,000 before it dropped by $2,000 when the falsehood was revealed.

The SEC later clarified that while the hack caused confusion, it did eventually approve Bitcoin for mainstream investment through spot Bitcoin exchange-traded funds (ETFs).

Council allegedly used online aliases such as Ronin, Easymunny, and AGiantSchnauzer and was found to have searched terms like "SECGOV hack" and "Telegram sim swap." He is also reported to have looked up the "federal identity theft statute" and "how long does it take to delete a Telegram account."

The SEC confirmed that its account was compromised through a SIM swap attack, a fraudulent technique where a person convinces a mobile carrier to transfer a phone number to a new SIM card. According to the allegations, Council obtained the personal information of an SEC employee from co-conspirators to execute this plan. The absence of multi-factor authentication (MFA) made the hack easier, as the SEC had requested its suspension in July 2023, later reinstating it after the incident.

Council faces charges of conspiracy to commit aggravated identity theft and access device fraud. If convicted, he could face up to five years in prison.

🥇 Not the First Cryptocurrency

Bitcoin is often heralded as the first cryptocurrency, but it was not the pioneer of digital currencies. Before Bitcoin's launch in 2009, there were several attempts at creating digital money, such as DigiCash in the 1990s and e-gold in the early 2000s. These earlier projects laid the groundwork for Bitcoin by exploring concepts like digital signatures and online transactions. However, Bitcoin distinguished itself by introducing a decentralised, blockchain-based system that solved many of the issues faced by its predecessors, such as centralization and trust in intermediaries. This innovation allowed Bitcoin to gain significant traction and establish itself as the first widely adopted cryptocurrency.

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