SEC postpones decisions on bitcoin ETF options proposals

The SEC delayed rule change proposals from Cboe, NYSE and Nasdaq to list options related to the bitcoin ETFs


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The Securities and Exchange Commission delayed a decision on letting Cboe list and trade options on bitcoin ETFs.

Cboe first applied to list and trade options on the newly launched bitcoin ETFs back in January. The SEC said on Wednesday it’s delaying a decision on the proposed rule change until late April.

Options can be used to hedge risk, allowing a party to enter into a contract where they can buy or sell a financial product at a certain price in a specified window of time.

Read more: Options on bitcoin ETFs could come soon, offering hedging tool for institutions

Cboe didn’t immediately return a request for comment on the delay.

Generally, CBOE can offer options three days after an ETP begins trading on a national securities exchange like Nasdaq or the New York Stock Exchange. 

“However, those rules do not apply to ETPs holding commodities such as Bitcoin. In addition to Cboe’s rule filing receiving SEC approval, Cboe understands that OCC may need certain approvals from its regulators (SEC and CFTC) to permit it to issue and clear these options,” Cboe said earlier this year.

Cboe isn’t the only exchange seeking to offer options. NYSE also filed to list “commodity-based trust shares.” 

Read more: Is it too soon to name BlackRock the bitcoin ETF segment winner?

Nasdaq seeks to list and trade options specifically on BlackRock’s iShares Bitcoin Trust ETF. In its January filing, the exchange said that options would give investors a “lower cost investing tool” while also offering a hedging vehicle. 

BlackRock’s IBIT has crushed records in its first few months. The ETF already has $10 billion in assets under management. Grayscale’s bitcoin ETF — which was converted from its bitcoin trust — has $26 billion in assets under management.

The SEC, alongside the Cboe delay, also announced that it was delaying a decision on the proposed rule changes on Wednesday. All three rule change proposals have the same late April decision date.

Grayscale, on Thursday, reaffirmed its support for the NYSE proposed rule change, though it specifically wants the SEC to greenlight options on its fund, GBTC.

“Our argument is straightforward: If investing in options for shares of products holding derivatives of an asset is acceptable for investors, investing in options for shares of products holding the asset itself should be as well,” Grayscale wrote in a blog post. 

In a post on X Wednesday, the firm also pushed for the SEC to “standardize a more consistent approach to approving options products on all identically-structured commodity ETFs that have been approved to list & trade on national exchanges” regardless of whether they hold bitcoin.

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