Key Points
- The SEC has delayed its decision on spot bitcoin ETF options by 45 days.
- The NYSE has filed a request to trade options on spot bitcoin ETFs such as Bitwise Bitcoin ETF and Grayscale Bitcoin Trust.
The decision on whether to allow options on spot bitcoin ETFs by American regulators has been postponed by 45 days.
The Securities and Exchange Commission (SEC) announced in a recent notice that it has set May 29, 2024, as the deadline for deciding whether to approve, disapprove, or initiate proceedings to determine disapproval. This decision will determine whether the New York Stock Exchange (NYSE) can begin listing options on spot bitcoin ETFs.
Spot Bitcoin ETFs in Focus
The Bitwise Bitcoin ETF and the Grayscale Bitcoin Trust were specifically named as two spot bitcoin ETFs. However, the proposal also included the possibility of “any trust that holds Bitcoin“.
The NYSE submitted a filing on February 9, requesting the SEC’s permission to trade options. As a self-regulatory organization (SRO), the NYSE had to first apply for a rule change and allow public input. The regulator had a 45-day period to allow comments and make a decision, or choose to delay again for up to 45 days, which it has now chosen to do.
Public Comments and Open Interest
Only two public comments were submitted in response to this proposal. One was from Grayscale CEO Michael Sonnenshein and the other from Professor James Angel of Georgetown University.
Angel’s 13-page letter critiqued the regulator’s handling of bitcoin ETFs and crypto in general. He pointed out that options already exist on the ProShares Bitcoin Strategy (BITO) futures ETF and the riskier leveraged 2x Bitcoin Strategy (BITX) bitcoin futures ETF.
According to data from OptionsCharts.io, the open interest on BITO options is nearly 1.1 million contracts, while BITX has 78,000 contracts in open interest. Allowing options trading on spot bitcoin ETFs could be a significant move for the NYSE.
For context, the SPDR Gold Shares ETF, GLD, has 2.8 million options contracts in open interest. However, it should be noted that the spot price of GLD shares is significantly higher than that of BITO’s.
