The U.S. Securities and Exchange Commission (SEC) has approved Nasdaq’s plan to launch new bitcoin-related options trading. This is another major step toward bringing the digital asset into the traditional US financial system.

The new product will trade on Nasdaq’s Philadelphia Stock Exchange under the ticker QBTC. These options are linked to a Bitcoin price index that tracks BTC prices from major exchanges in real time.

This approval gives both large investors and everyday traders a new way to bet on bitcoin’s price without actually buying or holding the asset.

However, the product is not ready to launch yet. The Commodity Futures Trading Commission (CFTC) must also approve it because bitcoin is legally treated as a commodity in the United States.

The SEC said it approved the proposal on an “accelerated basis,” meaning regulators moved faster than usual to clear the product.

The new QBTC contracts are cash-settled and European-style options. This means investors will receive profits or losses in cash when the contracts expire instead of receiving actual bitcoin.

Because no real bitcoin changes hands, traders do not need to worry about storing the digital asset or protecting digital wallets. The contracts also remove the risk of early assignment, which can happen with some other options products.

Unlike options linked to bitcoin exchange-traded funds (ETFs), these contracts follow a broader bitcoin price index. This could help traders track bitcoin’s actual market price more closely.

The SEC said the contracts will have a minimum price movement of one cent and a limit of 24,000 contracts per side.

The pricing system behind the contracts uses the CME CF Bitcoin Real Time Index, which updates bitcoin prices every 200 milliseconds using data from major exchanges.

Experts say the new product could attract institutional investors that want bitcoin exposure through regulated financial markets.

That mix makes the product especially appealing to institutional trading firms seeking exposure to bitcoin’s price movements without having to manage the custody, security, and operational challenges of holding the asset directly.

The approval comes as bitcoin-related investment products continue growing in the United States.

In January 2024, regulators approved spot bitcoin ETFs, allowing investors to gain bitcoin exposure through traditional stock-market products. Regulators later approved options trading tied to those ETFs as well.

The new Bitcoin index options add another product to the growing bitcoin derivatives market.

CME Group has offered bitcoin futures options since 2020, but Nasdaq’s new product could make bitcoin trading more accessible to regular stock-market investors through normal brokerage accounts.

Supporters believe regulated bitcoin products can move more trading activity into the US financial system instead of offshore exchanges.

SEC Chairman Paul Atkins has supported a more digital-asset-friendly approach since taking office. The agency has recently reduced several enforcement actions against digital asset firms and has pushed for clearer rules for digital assets.

Atkins has warned that forcing businesses outside the United States could create bigger risks for investors.

“The experience of the offshore growth and implosion of FTX demonstrates the folly of pretending that Americans will not be harmed if we do not address innovative technologies and thereby force them offshore,” Atkins said in a recent speech.

Many large digital asset trading platforms, including Binance and Hyperliquid, still operate outside the United States.