SEC postpones decision on Bitcoin ETF options trading
SEC delays Bitcoin ETF options trading decision
The United States Securities and Exchange Commission (SEC) has postponed its decision on whether to approve options trading on spot Bitcoin exchange-traded funds (ETFs) until April 24. The regulatory body cited the need for additional time to review the proposals from Nasdaq ISE, LLC, Cboe Exchange, Inc., and Miax Pearl LLC. The SEC’s extension allows for a more thorough consideration of the rule changes required to permit options trading on these ETFs, which are financial products that track the price of Bitcoin and allow investors to trade shares representing the cryptocurrency on traditional stock exchanges.
Options are financial derivatives that give traders the right, but not the obligation, to buy or sell an asset at a predetermined price within a specific time frame. They are used to speculate on the future price of an asset or to hedge against potential losses. The SEC’s decision will impact the ability of investors to engage in options trading on the iShares Bitcoin Trust (IBIT) by BlackRock, among other Bitcoin ETFs. The original deadline for the SEC’s decision was March 10, following a filing deadline of January 25.
The delay in the SEC’s decision comes despite public comments in favor of approving the options trading and follows the agency’s recent approval of ten spot Bitcoin ETFs on January 11. These ETFs have seen significant investment, with nine new ETFs accumulating $25.87 billion in assets under management as of March 6, excluding Grayscale’s converted ETF. The SEC is also reviewing seven spot Ether ETFs and multiple leveraged Bitcoin ETFs, with speculation that decisions on these products may align with other regulatory deadlines.
SEC Commissioner Hester Peirce has criticized the SEC’s current approach to cryptocurrency regulation, advocating for clear guidelines over enforcement actions. The outcome of the SEC’s decision on Bitcoin ETF options trading is anticipated to influence the involvement of hedge funds and other institutional investors in the cryptocurrency market.