NEW YORK - Nasdaq (NASDAQ:NDAQ), in collaboration with CF Benchmarks, has submitted a filing to the Securities and Exchange Commission to launch Nasdaq Bitcoin Index Options (XBTX), a move that could enhance the cryptocurrency market’s maturity and liquidity. The announcement was made today and, upon regulatory approval, the options will offer a new tool for managing positions and hedging investments in the digital currency space.
The XBTX will track the CME CF Bitcoin Real-Time Index (BRTI) and is designed to give both institutional and retail investors a significant risk management instrument. The index's calculations are performed every second, aggregating Bitcoin-USD order data from major cryptocurrency exchanges that meet stringent criteria.
With a European-style exercise and cash settlement, the final settlement value of these options will be tied to the CME CF Bitcoin Reference Rate - New York Variant (BRRNY), divided by 100. This rate provides a snapshot of the U.S. dollar price of Bitcoin, compiled from data between 3:00 pm and 4:00 pm, serving as a de facto closing price in the 24/7 cryptocurrency market.
Sui Chung, CEO of CF Benchmarks, expressed enthusiasm for the partnership, highlighting the potential for the options to complement existing Bitcoin futures, options, and ETFs, thereby drawing more institutional participation and enhancing market liquidity.
Nasdaq's initiative is part of a broader effort to support the digital asset ecosystem's growth through reliable technology and institutional adoption. This includes serving as a technology provider for Central Counterparties (CCPs) and Central Securities Depositories (CSDs), which play a crucial role in market stability and governance, as well as facilitating the launch and trading of Ethereum and Bitcoin Exchange Traded Products (ETPs).
The announcement is based on a press release statement and is pending regulatory review and approval. Nasdaq and CF Benchmarks have emphasized their commitment to fostering trust, transparency, and investor protection in the evolving digital asset landscape.
In other recent news, significant restructuring efforts are underway across various sectors in the United States and Canada, with companies like Cisco Systems (NASDAQ:CSCO), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT) announcing workforce reductions. Nasdaq also plans to reduce its workforce as it integrates fintech firm Adenza, while BlackRock (NYSE:BLK) intends to cut about 3% of its workforce. Meanwhile, Nasdaq reported a decrease in short interest across its Global Market and Capital Market securities as of the end of July. The company, along with BlackRock, has proposed to regulators to offer options trading on BlackRock's ethereum exchange-traded funds (ETFs). Oppenheimer has maintained an Outperform rating on Nasdaq and raised the price target to $78.00 from $75.00. Thoma Bravo, Nasdaq's top shareholder, is set to sell 41.6 million of its shares, generating approximately $2.79 billion. Concurrently, Nasdaq has entered into a share repurchase agreement to buy back 1,200,000 shares of its common stock. These are recent developments for these companies.
InvestingPro Insights
In light of Nasdaq's (NASDAQ:NDAQ) recent move to enrich the cryptocurrency market with the introduction of Bitcoin Index Options (XBTX), it's worth noting the company's financial health and market performance, which may influence investor sentiment. Nasdaq's commitment to innovation and market expansion is mirrored in its financial metrics and strategic decisions.
According to InvestingPro data, Nasdaq boasts a robust market capitalization of $40.66 billion, underscoring its significant presence in the exchange industry. The company's P/E ratio, sitting at 40.71, suggests that investors are willing to pay a higher price for earnings, potentially reflecting confidence in Nasdaq's future growth despite analysts anticipating a sales decline in the current year. Furthermore, Nasdaq's revenue growth over the last twelve months, as of Q2 2024, stands at an impressive 7.57%, indicating a healthy expansion in its operations.
An InvestingPro Tip highlights that Nasdaq has raised its dividend for 12 consecutive years, which could be a reassuring signal for investors looking for stable income, particularly as the company ventures into the volatile cryptocurrency market. Additionally, Nasdaq's strong return over the last five years aligns with its latest strategic move, suggesting an ability to adapt and potentially thrive in the emerging digital asset ecosystem.
For those interested in a deeper dive into Nasdaq's financials and strategic outlook, InvestingPro offers additional tips on the company's performance and projections. Currently, there are 9 more InvestingPro Tips available for Nasdaq, which can be accessed at https://www.investing.com/pro/NDAQ. These insights could provide valuable context as Nasdaq navigates the regulatory process for its Bitcoin Index Options and aims to solidify its position in the digital asset space.
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