If you’re like many investors, you may never have heard of the CBOE… but that’s going to change soon.
Recently, it made a huge announcement that could send bitcoin over $10,000… or even higher.
CBOE is short for the Chicago Board Options Exchange. Opened in 1973, the CBOE is known as the first marketplace for trading listed options.
Since then, it’s become a leading global exchange operator. It’s the largest U.S. options exchange, with annual trading volume of around 1.1 billion contracts.
The CBOE offers options on over 2,200 companies, 22 stock indexes, and 140 exchange-traded funds (ETFs).
Today, it’s the No. 1 U.S. options market. It’s also No. 1 in U.S. and European equities by retail volume.
Over the years, it introduced many innovative products. Including…
Long-Term Equity Anticipation Securities (LEAPS) in 1990. LEAPS are like long-term options that help investors reduce risk.
Listing options on the Dow Jones Industrial Average in 1997.
And being the first to launch bitcoin futures in 2017.
In short, the CBOE is one of the most credible financial institutions in the world. So, when it plans to introduce a new product, it’s smart to pay attention.
Here’s the thing…
The CBOE recently made a pivotal announcement. And it will have huge implications for the cryptocurrency market.
Third Time’s the Charm
You see, on June 26, the CBOE filed an application with the Securities and Exchange Commission (SEC). And it’s for a bitcoin ETF.
In the filing, CBOE said it will list and trade shares issued by the VanEck SolidX Bitcoin Trust. That’s a joint venture between investment management firm VanEck and financial services company SolidX.
This is the trust’s third attempt to gain approval. (The SEC has rejected over a dozen other bitcoin ETFs in the past.) But this filing has the best chance for approval yet.
So, the question is: What changed this time around that will lead to the first-ever bitcoin ETF?
Three Reasons the SEC Will Say Yes
The first reason is the CBOE.
It brings credibility to the product. The CBOE already brought bitcoin futures to the market. It’s averaging 7,000 contracts per day.
And it’s solving one of the issues highlighted by the SEC in past bitcoin ETF rejections.
The problem it’s solving—and this is the second reason the SEC will say yes to the fund—has to do with safety. Specifically, the CBOE will provide insurance.
You see, one of the SEC’s missions is to protect investors. Regulators want to see certain safeguards in place before they’ll approve a product.
Insurance would protect cryptocurrency investors from fraud, hacks, or the loss of private keys used to access crypto funds.
That’s why providing insurance is critical to a bitcoin ETF’s approval.
Per the filing:
The Trust will maintain comprehensive insurance coverage underwritten by various insurance carriers. The purpose of the insurance is to protect investors against loss or theft of the Trust’s bitcoin. The insurance will cover loss of bitcoin by, among other things, theft, destruction, bitcoin in transit, computer fraud and other loss of the private keys that are necessary to access the bitcoin held by the Trust.
The SEC has another concern about cryptocurrencies. That’s the lack of global regulatory rules surrounding cryptocurrency exchanges.
But that, too, has changed. And it’s the third reason the SEC will say yes.
Japan and South Korea recently made improvements in regulating cryptocurrency exchanges. They are two of the biggest countries by cryptocurrency trading volume.
Japan introduced stricter guidelines for cryptocurrency exchange platforms in May.
It will improve security standards, know-your-customer (KYC) regulations, and asset management practices.
Something similar is happening in South Korea.
South Korea reclassified cryptocurrency exchanges from “communication vendors” to regulated financial institutions. That happened in June.
It beefed up guidelines for anti-money laundering (AML) and KYC. And it’s improving customer due diligence, too.
We now have the CBOE, insurance, and better global regulations. That’s what the SEC is looking for.
We’ll likely see the SEC approve the bitcoin ETF this time around. And it could happen before the year is out.
That would be wildly bullish for bitcoin and cryptocurrencies in general.
The “Buy Bitcoin” Easy Button
On July 11, Palm Beach Confidential editor Teeka Tiwari told his subscribers this
Mark my word, friends, this ETF will get approved. When it’s as easy to buy bitcoin as logging into your Fidelity account and pushing a “buy” button, you will see tens—if not hundreds—of billions flow into this ETF.
This is the most pivotal announcement that I have seen not only this year, but ever within this space. When we can get an ETF that makes it easy to buy, sell, and hold bitcoin, it’s going to open the floodgates of capital to people who would have never ever opened up an account on Coinbase or who would have never ever messed around with a digital wallet. It now allows the mainstream adoption of bitcoin by the everyday investor, and it’s wildly bullish.
So, what should you do now?
If you already hold bitcoin, don’t let the current volatility scare you out of your position. And if you don’t own any bitcoin, consider buying some today, before the floodgates open.
If you do invest in this emerging asset class, we always recommend you take a small position size. Don’t bet more than you can afford to lose—$200–$400 is enough for a small investor to make life-changing gains.
Bitcoin and all cryptocurrencies are volatile. So, small position sizes will allow you to keep a cool head during extreme periods of volatility in the crypto market.
Analyst, Palm Beach Confidential