- The SEC has extended its review period to allow Bitcoin ETF options trading on the NYSE, including Bitwise and Grayscale Trusts.
- The postponement aims to give the SEC ample time to delve deeper into the complexities and implications of incorporating cryptocurrency derivatives.
- Following last month’s decision to delay Nasdaq’s request, the SEC has set a new deadline in May 2024 for its decision on Bitcoin ETF options trading.
The United States Securities and Exchange Commission (SEC) has delayed its decision to allow options trading for spot Bitcoin ETFs on the New York Stock Exchange. According to a filing made public on April 8, the decision will impact trusts that hold Bitcoin on the NYSE, along with the Bitwise Bitcoin ETF (BITB) and the Grayscale Bitcoin Trust (GBTC). The filing read,
The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change,” the SEC wrote in the filing.
Options are financial derivatives that offer traders leverage and allow speculation on market directions. For instance, if a trader predicts an increase in Bitcoin’s value, they could purchase a call option. This contract permits buying 1 BTC at the current price after one month, requiring a lower initial investment.
If Bitcoin’s price rises within this period, the trader can exercise the option to buy at a favorable rate and potentially sell at a profit. Conversely, a price drop would likely lead the trader to abandon the contract, also forfeiting the premium.
For now, the crypto community will have to wait till May 29, 2024, which is the next deadline for the SEC’s decision. However, the commission can delay this even further or deny it entirely. This follows the SEC delaying its decision regarding Nasdaq’s requisition to allow options trading for BlackRock’s iShares Bitcoin Trust.
The proposal, first submitted on January 12, 2024, seeks to modify Rule 915, which comprises the SEC’s procedures and standards for listing securities, specifically in the context of equity options and index options. NYSE initially filed the proposal, followed by Nasdaq and Cboe, which also made their own proposals on Jan. 19.
Amidst this backdrop, industry proponents have been requesting the U.S. regulator to approve the proposed rule change. Michael Sonnenshein, CEO of Grayscale, penned a letter to the SEC on February 28, claiming that the regulator has no reason to deny options for Bitcoin ETFs. He based his argument on the fact that the SEC had already approved Bitcoin futures ETFs and spot Bitcoin ETFs on the NYSE.
