(Bloomberg) -- As the first cryptocurrency exchange-traded funds begin trading, Wall Street is on stand by for the next stage of evolution in digital assets: options.

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As the world’s largest options exchange, Cboe Global Markets Inc., has already filed for approval to offer options tied to exchange-traded products holding Bitcoin. The derivatives are favored by investment pros — as well as increasingly sophisticated retail investors — as a way to make wagers on future gains or hedge against losses.

The exchange submitted the filing to the US Securities and Exchange Commission last week, noting that approval for Bitcoin ETFs was expected sometime this week. After markets closed on Wednesday, financial regulators greenlighted 11 spot Bitcoin ETFs, clearing the way for products from the likes of BlackRock Inc., Invesco Ltd. and a slew of other firms.

Generally, investors can buy and sell options on a product three days after its shares begin trading on an exchange, but those rules do not apply to products that hold commodities such as Bitcoin, according to a release from Cboe.

The exchange intends to list options contracts on the products “as soon as all regulatory approvals are received, which is expected later in 2024,” per the release.

“Now that the spot Bitcoin ETFs are approved, I would suspect that options on these ETFs will not be too far behind,” said Bret Kenwell, a US options investment analyst at eToro Group Ltd, adding that investors “would be able to use options on these ETFs to gain long, neutral, or short exposure, hedge, etc.”

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