Nasdaq is seeking the green light from regulators to launch and trade options on a bitcoin index, the exchange operator said on Tuesday.

The U.S. Securities and Exchange commission has yet to approve options based on any of the individual exchange-traded funds tied to spot bitcoin prices that made their debut in January, including a Nasdaq application to trade options on BlackRock's $21.3-billion iShares Bitcoin Trust ETF .

The proposed index options - listed derivatives offering a quick and inexpensive way to amplify exposure to bitcoin - on a bitcoin index would give institutional investors and traders an alternative way to hedge their exposure to the world's largest cryptocurrency.

"It's important for options on bitcoin to be available for this asset class to be fully normalized," said Matt Hougan, chief investment officer of Bitwise, one of the group of asset managers that brought bitcoin ETFs to market this year. "We're missing a part of the liquidity picture that ETF options would provide."

Options are listed derivatives that give the holder the right to buy or sell an asset, such as a stock or exchange-traded product, at a predetermined price by a set date. They offer traders a cheap way to amplify their purchasing power, while institutional investors use them to hedge risk.

The proposed Nasdaq Bitcoin Index Options would track the CME CF Bitcoin Real-Time Index, developed by CF Benchmarks to track bitcoin futures and options contracts available on the exchange operated by CME Group, Nasdaq said.

While waiting for regulators to approve or deny options on the new spot bitcoin ETFs, traders have turned to other products, such as recently-launched leveraged ETFs tied to bitcoin and options on those funds.

Exchanges began applying for the spot bitcoin ETF options as soon as it was clear the SEC would approve the underlying ETFs in January. But in recent weeks, they have withdrawn and then refiled those applications in response to SEC comments, said people familiar with the matter.

(Reporting by Suzanne McGee; Editing by Rod Nickel)