Spot bitcoin ETFs options trading decision postponed

Spot bitcoin ETFs options trading decision postponed is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• SEC postpones decision on options trading for spot bitcoin ETFs, extending review period following NYSE filing.
• Grayscale CEO advocates for approval, arguing that if options for derivative-holding products are allowed, options for products holding the asset itself should be permissible.
• Cboe also seeks approval for options trading on spot bitcoin funds, awaiting SEC decision by April 24.

The SEC extends review on options trading for bitcoin ETFs, responding to NYSE’s proposal. Grayscale CEO pushes for approval, while Cboe awaits decision.

SEC postpones decision on bitcoin ETF options trading

The Securities and Exchange Commission has postponed its decision regarding approval of a rule amendment enabling options trading on spot bitcoin exchange-traded funds.

Also read: Are spot bitcoin ETFs really better than gold?

In a filing on Monday, the agency announced an extension of the timeframe for considering a proposal from the New York Stock Exchange (NYSE) “to permit the listing and trading of options” on the Bitwise Bitcoin ETF (BITB), the Grayscale Bitcoin Trust (GBTC), “and any trust that holds bitcoin.”

“The Commission deems it appropriate to allocate a longer period for taking action on the proposed rule amendment,” stated the SEC in the filing.

The NYSE initially submitted the rule amendment request on February 9, which was published in the Federal Register, initiating a 45-day feedback period scheduled to conclude on April 14. The Federal Register serves as the daily compendium of federal government regulations, proposed regulations, notices, and executive directives.

Investors utilize options to engage in contracts allowing them to purchase or sell a stock or exchange-traded fund at a predetermined price within a specified period. Options are commonly employed by investors for speculation, risk mitigation, or generating income.

OUR TAKE:
As a bitcoin enthusiast, I welcome the SEC’s decision to consider options trading on spot bitcoin ETFs. It’s a positive step towards greater access and flexibility for investors. The surge in demand for crypto investment instruments this year shows the potential of this market and I’m optimistic about its future growth.
–Tilly, BTW Reporter

Surge in cryptocurrency investment demand

This year has seen a surge in demand for cryptocurrency investment instruments subsequent to the SEC’s authorization of 10 spot bitcoin ETFs on January 10. Since their inception the following day, these funds have amassed approximately $60 billion in assets under management, contributing to a nearly 60% year-to-date appreciation in value. Bitcoin, the world’s foremost asset by market capitalization, was trading above $70,500 late on Wednesday (ET).

Numerous firms are eager to introduce products enabling investors to hedge their exposure to the cryptocurrency.

The SEC’s upcoming deadline to determine the fate of the rule amendment is May 29.

Industry leaders advocate for rule amendment

The agency has permitted options trading on bitcoin futures ETFs since 2021.

Grayscale CEO Michael Sonnenshein submitted a public comment on February 28, urging the SEC to greenlight the NYSE’s rule amendment. “Our argument is simple: if investing in options for shares of products holding derivatives of an asset is deemed acceptable for investors, then investing in options for shares of products holding the asset itself should likewise be permissible,” he asserted.

The Cboe exchange has also lodged a proposal seeking approval for options trading on spot bitcoin funds. The SEC has until April 24 to make a determination on the exchange’s submission. Cboe noted in its filing that, while it typically allows options trading three days post-approval, “exceptions exist for ETPs containing commodities.”