CBOE Digital president says a spot bitcoin ETF approval will promote derivatives growth

CBOE’s John Palmer said that potential bitcoin ETF approvals would “pave the way” for pension funds to invest in a spot bitcoin ETF

article-image

JHVEPhoto/Shutterstock modified by Blockworks

share

CBOE Digital President John Palmer says that the potential approval for a spot bitcoin ETF could broaden the ecosystem for institutions and retail.

“I think seeing that approval really is gonna pave the way for pension funds and RIA-based funds to be able to invest assets in a spot Bitcoin ETF where they may not be able to gain that access today and just a native spot, Bitcoin token,” Palmer said.

Any potential approvals for an ETF could also change how institutions approach derivatives, Palmer added. Derivatives include options and futures contracts.

“So you have more players, institutional players that are used to hedging their risk. And so they lean on derivatives quite heavily to be able to hedge that risk…And so, as that ecosystem evolves, they’re going to lean on those derivatives more and more,” Palmer said.

Read more: This proposed bitcoin ETF has a twist. Would investors bite?

“So I think we’ll see that ecosystem on the derivative side, grow with the growth in the spot ETF as well.”

However, Palmer doesn’t think that the total breakdown will just be institutions. While he added that “it’s gonna be hard to judge what the breakdown is gonna be yet,” he also added that “institutions will lead the way” with the spot bitcoin ETF-involved participants using the hedging tools, but “retail will also look for that as well.”

Overall, ETFs give both institutions and retail a “broader ecosystem,” according to Palmer.

The US Securities and Exchange Commission is expected to hand down a decision on potential spot bitcoin ETFs by January 10. Ahead of the new year, a handful of potential issuers submitted fresh amendments to their S-1s, with firms including BlackRock disclosing authorized participants. 

As Blockworks previously reported, the inclusion of APs is one of the details that the SEC is looking for ahead of potential approval. 

“The SEC is ready to approve spot bitcoin ETFs, but only if they have clear language around cash-only creations and have a signed agreement with an authorized participant,” Bloomberg Intelligence analyst Eric Balchunas wrote in a note at the end of December.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (15).png

Research

A spot listing on Binance can support highly favorable short term returns. Tokens that TGE on Binance exhibit lower short term returns when compared to tokens that receive the listing after TGE. Both spot and futures listings support higher returns, while a spot listing is historically more favorable. Tokens that have yet to receive a Binance spot listing may be trading at a 30-50% discount to their market value upon receiving a Binance spot listing.

article-image

Maple’s Sid Powell said that TradFi firms have been in contact with the firm about lending and borrowing in crypto

article-image

Building onchain public goods is noble but they don’t always make the number go up

article-image

Vector is a mobile social trading app with a built-in crypto wallet that lets users broadcast their trades to other users

article-image

Kraken Pay is only the latest product in the growing crypto payments landscape

article-image

One ex-SEC senior counsel doesn’t “expect an overnight response to this, [but] rather a slow rollout of approvals”

article-image

The unemployment rate has “stabilized” and the labor market is “solid,” officials said