The U.S. Securities and Exchange Commission (SEC) has pushed back its decision on a rule change allowing exchanges to trade options on spot bitcoin ETFs, as stated in a recent filing.
The delay until late April concerns requests from the CBOE Exchange and the Miami International Securities Exchange regarding multiple spot bitcoin ETFs tied to the cryptocurrency’s market value.
“The Commission finds it necessary to extend the timeframe to consider the proposed rule change thoroughly,” the SEC filing explained.
The applications to list options on bitcoin funds were initially submitted in January, coinciding with the SEC’s approval of 10 new spot bitcoin products. Despite over $10 billion in outflows from the Grayscale Bitcoin Trust (GBTC), spot bitcoin ETFs have seen significant inflows, totaling over $9.3 billion as of March 7’s equity market close. Notably, BlackRock’s iShares Bitcoin ETF (IBIT) reached over $10 billion in assets under management, becoming the fastest ETF in history to do so. This surge comes amid Bitcoin’s record-breaking rally, surpassing $69,000 this week.
Analysts and financial advisors view call and put options on bitcoin ETFs as essential strategies to manage crypto’s volatility, using them to hedge risks. These options function similarly to those on stocks, allowing investors to trade ETFs throughout the day based on agreed-upon prices over a specific period.
While the CBOE typically lists options on new exchange-traded products shortly after their market debut, commodities like bitcoin require special permission from the SEC. Grayscale Investments emphasized the importance of exchange-listed options on GBTC and other spot Bitcoin ETPs, highlighting their role in price discovery, offering investor choice, and managing market conditions.
Despite the SEC’s previous approval of ETFs linked to bitcoin futures, the green light for spot bitcoin ETFs only came in January after years of regulatory hurdles. Even before these approvals, Wall Street had been exploring various cryptocurrency-based investment products. On March 4, the SEC delayed a decision on a BlackRock proposal for an exchange-traded fund based on ether, the second-largest digital asset by market capitalization, which surged above $4,000 for the first time in two years.
