Key Points
- The SEC is postponing decisions on proposals for options on spot bitcoin ETFs and is seeking public feedback.
- Several exchanges have applied to facilitate options trading on the newly approved spot bitcoin ETFs.
The U.S. Securities and Exchange Commission (SEC) is once again putting off a number of proposals that would permit options on spot Bitcoin exchange-traded funds (ETFs), and is calling for public opinion.
Exchanges and Public Input
A number of exchanges, including Cboe Exchange, Inc., BOX Exchange LLC, MIAX International Securities Exchange LLC, Nasdaq ISE, LLC, and NYSE American LLC, have submitted applications to allow options trading on the newly approved spot bitcoin ETFs. All of them were named in the SEC’s Thursday filing.
The SEC has given the public 21 days to provide comments and 35 days to provide rebuttal comments. The commission is seeking feedback on whether options on spot bitcoin ETFs should follow the same rules as stocks.
Previous Delays and Public Comments
The SEC has previously postponed decisions on future steps for options trading. Over the past few months, the proposals have received some comments. Some individuals have suggested that options trading on spot bitcoin ETFs could assist investors in hedging their positions and managing risk.
In January, the SEC approved 11 spot bitcoin ETFs, which have since received a cumulative total net inflow of $12.38 billion. Grayscale CEO Michael Sonnenshein, in a February comment letter, stated that the next “natural step” is to approve options on these products.
He argued that, now that spot Bitcoin ETPs have been approved for trading on NYSE Arca according to the Rule 19b-4 process, the logical next step is the approval of options on spot Bitcoin ETPs. He drew parallels with how options on spot gold ETPs were approved for listing and trading following the initial approval of spot gold ETPs.