The New York Stock Exchange (NYSE) has announced plans to list options on an index based on the price of bitcoin, marking a new foray by a traditional financial giant into the crypto space.
These derivatives, which will be cash-settled, will be based on CoinDesk’s Bitcoin Price Index (XBX), an established benchmark for the past decade by CoinDesk Indices, its sister company.
The XBX, a benchmark for $20 billion of ETF assets under management
The XBX is currently the benchmark for $20 billion of assets under management in ETFs, according to a press release published this Wednesday.
Jon Herrick, NYSE’s Head of Products, expressed enthusiasm for the recent approval of Bitcoin Spot ETFs and the growing interest from both traditional institutions and retail investors in these products.
Following the regulatory approval of Bitcoin ETFs, these options contracts will offer investors a liquid and transparent risk management tool.
Jon Herrick, Head of Products at NYSE
Broader implications for the financial industry
Bitcoin derivatives played a major role in the introduction of Bitcoin Spot ETFs this year, which have become one of the most successful ETF launches in history. NYSE, owned by Intercontinental Exchange, which competes with CME Group whose Bitcoin futures contracts are widely recognized in the industry, is thus strengthening its position in the market.
NYSE’s entry into this field offers another gateway for traditional finance (TradFi) standards to cryptocurrencies.
In 2023, ICE Futures Singapore, an entity within Intercontinental Exchange, collaborated with CoinDesk Indices to use XBX in the settlement of its monthly Bitcoin futures contracts in this country.
