The New York Stock Exchange (NYSE) has announced its intention to introduce cash-settled spot Bitcoin options, pending regulatory clearance. The new Bitcoin options on the NYSE will track the CoinDesk Bitcoin Price Index (XBX) to determine their value. This index, created by CoinDesk Indices, has been around for a decade and is already used to track over $20 billion worth of Bitcoin ETFs.

NYSE’s Bitcoin Options Signal Growing Institutional Interest

The success of Bitcoin derivatives this year is seen as a key factor enabling the launch of spot Bitcoin ETFs, which have been hugely popular. BlackRock’s IBIT Bitcoin ETF stands out as the biggest one yet, holding a massive $19.65 billion in assets. Even though the NYSE plans to launch these options, it’s not the company’s first foray into crypto derivatives. Parent company, the InterContinental Exchange (ICE), already offers futures contracts for Bitcoin through ICE Futures Singapore.

Bitcoin Trading Plans Signal Wall Street’s Crypto Embrace

Back in 2018, ICE launched Bakkt, a subsidiary offering physical Bitcoin futures. However, these futures struggled to compete with cash-settled options from the Chicago Mercantile Exchange (CME), and Bakkt eventually shifted its focus. Earlier this month, CME announced plans for Bitcoin trading. This move reflects Wall Street’s growing appetite for cryptocurrency, with big financial players entering the crypto space in increasing numbers. In March, the NYSE took a step towards eco-friendly Bitcoin investing, proposing to list 7RCC’s environmentally-conscious spot Bitcoin ETF. This product offers investors exposure to Bitcoin alongside carbon credits, aiming to offset the environmental impact of cryptocurrency.

NYSE’s Bitcoin Options to Offer Investors a Risk-Management Tool

Jon Herrick, chief product officer at the NYSE, said, “As traditional institutions and everyday investors are demonstrating their wide-ranging enthusiasm for the recent approval of spot bitcoin ETFs, the New York Stock Exchange is excited to announce its collaboration with CoinDesk Indices.” He added, “Upon regulatory approval, these options contracts will offer investors access to an important liquid and transparent risk-management tool.”

XBX: A Trusted Price of Bitcoin

XBX tracks the spot price of bitcoin, denominated in U.S. dollars, in real-time across multiple crypto exchanges. XBX is calculated and published once per second, 24 hours a day, 365 days a year. Andy Baehr, Head of Product at CoinDesk Indices, said, “XBX has delivered a trusted price of bitcoin to millions of investors, market participants, and bitcoin enthusiasts since 2014.” He added, “Collaborating with the NYSE to launch XBX index options opens a new chapter in digital assets, placing important and familiar risk-management tools in the hands of U.S. and global investors.”

Conclusion

The NYSE’s move to offer Bitcoin options signals a growing interest in cryptocurrency and reflects Wall Street’s growing appetite for digital assets. The collaboration between NYSE and CoinDesk Indices will offer investors access to a trusted and transparent risk-management tool, further legitimizing the use of cryptocurrency in mainstream finance. As the crypto space continues to evolve, it will be interesting to see how traditional financial institutions adapt and innovate to meet the growing demand for digital assets.