The Securities and Exchange Commission (SEC) in the United States has started discussions on a proposed rule change for the trading of options on Bitcoin exchange-traded funds (ETFs) and is seeking public feedback on the matter. The SEC will review the potential impacts of introducing Bitcoin options trading on the broader market, focusing on whether current surveillance and enforcement mechanisms are sufficient to manage the unique characteristics of Bitcoin options. Various exchanges, including Cboe Exchange, Inc., BOX Exchange LLC, MIAX International Securities Exchange LLC, Nasdaq ISE, LLC, and NYSE American LLC, have submitted requests to enable options trading on recently approved spot bitcoin ETFs.
Interested parties are invited to submit comments on the proposal within 21 days after the official registration of the document, with a final deadline set for May 15. The SEC also questioned whether options trading on spot Bitcoin ETFs should adhere to the same regulations as stocks. Bitcoin options are financial instruments that grant the purchaser the right, but not the obligation, to buy or sell Bitcoin at a predetermined price by a specified date. The SEC previously solicited feedback on the proposed rule amendment, incorporating received commentary in its filing, with most comments highlighting the potential benefits of introducing options on Bitcoin ETPs.
Asset management firms like Bitwise and Grayscale are actively pursuing regulatory clearance to list options on their Bitcoin ETFs through applications to the New York Stock Exchange. In a February comment letter, Grayscale CEO Michael Sonnenshein emphasized the logical progression of approving options on these products, drawing parallels with the approval process for options on spot gold ETPs following their initial approval. The latest delay in the decision-making process regarding options trading follows a previous postponement earlier this month, with the SEC extending the review period for allowing options trading on Grayscale and Bitwise Bitcoin ETFs, setting a new decision date for May 29.
Overall, the SEC’s review of Bitcoin options trading on ETFs aims to assess the potential impacts on the market and determine whether exchanges’ surveillance and enforcement mechanisms are adequate to manage the unique characteristics of Bitcoin options. Interested parties have the opportunity to submit comments on the proposal, with a final deadline of May 15. The delay in the decision-making process regarding options trading for Bitcoin ETFs follows a previous postponement and indicates ongoing discussions and evaluations within the SEC. Asset management firms like Bitwise and Grayscale are actively seeking regulatory approval to list options on their Bitcoin ETFs, highlighting the potential benefits and opportunities that options trading on Bitcoin ETPs could offer investors.
