- SEC delays BlackRock Ethereum ETF options decision until April 9, 2025, for review.
- BlackRock’s ETHA leads spot Ethereum ETFs with $3.7B in total assets since July 2024.
- SEC invites public comments on Fidelity’s Ethereum ETF options proposal for review.
The U.S. Securities and Exchange Commission (SEC) has postponed its decision to approve options trading for BlackRock’s iShares Ethereum Trust ETF (ETHA). The agency cited the need for additional time to evaluate the proposal. A final decision is now expected by April 9, 2025.
SEC Extends Review Period for BlackRock’s Ethereum ETF Options
BlackRock, the world’s largest asset manager, submitted a proposal through Nasdaq in August 2024 to allow options trading on its Ethereum ETF. The SEC has been reviewing the request and announced on February 7, 2025, that assessing the proposed rule change requires more time.
In an official filing, the SEC stated, “The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.” The move reflects established regulatory procedures previously applied towards financial products linked to cryptocurrencies.
The decision delays the waiting period for market participants planning to trade derivatives of Ethereum ETFs. If approved ETHA options trading may open up new opportunities for hedging and speculation to investors.
Growing Demand for Crypto ETF Options
The interest in crypto ETF options has seen an enormous increase. In September 2024 the spot Bitcoin ETF (IBIT) managed by BlackRock won approval for its options trading program. Open interest for IBIT options exceeded $13 billion and made them one of the most active ETF derivative markets after trading started in November.
The success of Bitcoin ETF options has fueled expectations that Ethereum ETF options could attract similar demand. Spot Ethereum ETFs were introduced in July 2024 and have amassed approximately $9 billion in net assets. BlackRock’s ETHA has led the category with $3.7 billion in total assets.
Including options trading may boost liquidity and supply options for institutional investors in a more sophisticated risk management tool. Yet there are apprehensions about market volatility and risks to the retail investors.
SEC Seeks Feedback on Fidelity’s Ethereum ETF Options
The SEC’s decision delay comes as industry participants express differing views on cryptocurrency ETF options. Better Markets, a nonprofit financial advocacy group has urged caution.
In a letter responding to the Nasdaq proposal, Benjamin Schiffrin, Director of Securities Policy at Better Markets, stated, “Retail investors already lose billions of dollars trading options. Options on spot Ether ETPs would only give sophisticated market participants another way to use options trading to take advantage of the retail investors to whom the options will inevitably be marketed.”
Additionally, on February 7, 2025, the SEC requested public comments on a proposal from Cboe BZX Exchange Inc. to list and trade options on Fidelity’s spot Ethereum ETF. The agency has invited public input, with submissions due within 21 days of publication in the Federal Register.
