On January 29, Cboe BZX Exchange made minor adjustments to the quoting and minimum tick size rules for Bitwise Bitcoin ETF (MBTX) options, which have been approved by the SEC. Following this change, MBTX options are further aligned in quoting precision and trading experience with IBIT and other mainstream Bitcoin ETF options products, seen as another step towards optimizing the market structure for Bitcoin ETF options.

Key Information on Quoting Rule Adjustments

● News Driven:
- On January 29 (UTC+8), according to Wu Says Blockchain citing SEC documents, Cboe BZX adjusted the price quoting and minimum tick size rules for MBTX options, with the updated rules taking effect immediately after SEC approval.
- The core goal of this adjustment is to align the tick size settings of MBTX options with the already active IBIT and other Bitcoin ETF options in the market, reducing usage differences between products and facilitating unified configurations for market making and institutional arbitrage strategies.

● Minimum Tick Size and Quoting Precision:
- In the documents submitted to the SEC, Cboe made minor adjustments to the minimum tick size for MBTX options, ensuring that the minimum quoting increments at different price levels and degrees of in-the-money/out-of-the-money are consistent with similar ETF options products.
- This adjustment means:
- Deep out-of-the-money, low premium contracts can use finer quoting granularity for order placement and matching;
- At-the-money or in-the-money contracts can maintain sufficient price precision and liquidity aggregation efficiency while ensuring market stability;
- The bid-ask spread of MBTX options is theoretically expected to be further compressed, creating a finer quoting space for high-frequency and institutional market-making strategies.

● Alignment with Mainstream Bitcoin ETF Options:
- Cboe explicitly stated in the documents that the modification of MBTX options quoting rules aims to achieve consistency in tick size and quoting structure with currently listed Bitcoin ETF options (including IBIT) on BZX or other major exchanges.
- From a regulatory perspective, such "alignment actions" are viewed as technical and coordinated adjustments, rather than risk increments, and the SEC typically adopts a smoother approval path for such minor adjustments.

Deep Logic of Market Structure and Regulatory Orientation

The minor adjustment of MBTX options quoting rules is not an isolated technical correction but resonates with the broader context of the rapid institutionalization and standardization of the Bitcoin ETF options market. On one hand, the IBIT and other leading Bitcoin ETFs continue to enhance their activity in both spot and options dimensions, forcing subsequent products to be as structurally compatible as possible to reduce institutional friction costs in arbitrage and hedging strategies; on the other hand, after the first batch of spot Bitcoin ETFs were approved, the SEC has taken a "prudent and open" stance on the trading rules for derivatives surrounding these ETFs, often granting high predictability approvals for structural minor adjustments submitted by exchanges, as long as they do not amplify leverage and systemic risks. By aligning with existing products in tick size and quoting framework, MBTX options not only benefit from cultivating their own liquidity but also objectively promote the formation of a more unified technical standard and regulatory practice baseline in the Bitcoin ETF options market.

Bullish and Bearish Perspectives and Market Participant Dynamics

● Bullish/Supporters:
- They believe this rule adjustment represents a clear positive advancement for market structure:
- Sharing a unified tick size system with IBIT and other mainstream ETF options facilitates seamless switching for arbitrage and hedging across different products, improving the execution efficiency of cross-product spread trading and volatility strategies;
- Finer quoting increments help compress bid-ask spreads, attracting more market makers and professional traders to participate, thereby improving the depth and order book quality of MBTX options;
- The SEC's rapid approval of such technical revisions signals a regulatory stance that Bitcoin ETF derivatives are "manageable and monitorable," which is beneficial for institutions to enhance their mid- to long-term allocation confidence.

● Bearish/Opponents:
- They worry that this adjustment may not lead to immediate improvements in trading volume and liquidity in the short term:
- Even if the tick size aligns with products like IBIT, the current trading base of MBTX options remains relatively limited, and merely optimizing quoting rules may not quickly narrow the volume gap with leading products;
- Finer quoting granularity on less active underlying assets may lead to an appearance of "denser prices, thinner quantities" in the order book, while actual transactions remain insufficiently concentrated;
- In a phase of slowing Bitcoin price volatility and overall risk appetite cooling, the structural benefits have limited marginal appeal for new capital, and MBTX options still require time and market education to cultivate a user base.

Future Focus and Market Outlook

In the short term, the market will focus on the liquidity changes and spread performance of MBTX options after the new rules take effect, including whether the bid-ask spread narrows significantly, whether market depth steadily improves, and whether the differences in volatility surface and implied volatility premium structures with IBIT and other products diminish. In the medium term, as more Bitcoin ETF derivatives achieve unification of quoting, tick size, and risk management rules across different exchanges, the entire Bitcoin ETF options ecosystem is expected to move towards a higher degree of institutionalization and standardization. If Cboe and other exchanges further submit technical revisions regarding transaction matching mechanisms, margin optimization, etc., along with the gradual easing by the SEC, it will continue to shape the competitive landscape and efficiency ceiling of this emerging derivatives market.

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