US SEC Postpones Decision on Spot Ethereum ETF Options Until December
The United States Securities and Exchange Commission (SEC) has again delayed deciding on Ethereum (ETH) spot exchange-traded fund (ETF) options. According to an official filing, the Commission is exercising its right to authority more time to decide whether or not it will approve options tied to spot ETH ETFs.
The SEC’s approval of spot Bitcoin ETFs in January has significantly expanded the crypto investment landscape. In addition to institutional investors becoming more comfortable with trading crypto products, there is more attention paid to crypto by retail investors who are interested in more ways to earn.
Although BTC and ETH are enjoying most of the regulatory attention, the attraction to crypto has spread to several other altcoins, including new and established memecoins. Investors are exploring surging meme coins to enjoy speculative action on promising tokens that are likely to surge in November and beyond. These assets offer unique features, including staking, integration in gaming ecosystems, and the chance to earn from potential price spikes.
Cboe’s Journey to ETH ETF Options
The process began in August when Cboe Exchange applied to the SEC to list options for several ETFs, including those issued by BlackRock, Grayscale, Fidelity, and Invesco, as well as a few others.
According to the SEC’s release from Assistant Secretary Sherry R. Haywood, the initial 45-day decision period allowed by law expires on October 19, 2024. However, the SEC is postponing a decision so that it can continue deliberations. The agency has now set a new date in December.
“Accordingly, the Commission…designates December 3, 2024 as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove the proposed rule change.”
Interestingly, the SEC approved a rule change in September, that allows Nasdaq’s International Securities Exchange (ISE) to list options on Blackrock’s iShares Bitcoin Trust (IBIT), the giant asset manager’s spot BTC ETF. Although the SEC is on board, greenlight from the Commodity Futures Trading Commission (CFTC) and the Options Clearing Corporation (OCC) has yet to be granted.
Speaking during a panel discussion at the Permissionless conference, Bloomberg ETF analyst James Seyffart said Bitcoin ETF options should be available for trading possibly by the end of the year, but “more likely” in the first quarter of next year. The analyst explained that the delay may be extended because the CFTC and OCC do not have strict deadlines like the SEC. It is worth noting that Seyffart has not been very bullish about ETH ETFs, and has suggested they will not perform like their Bitcoin counterparts did.
Potential Impact
The availability of options on spot ETH ETFs gives investors more ways to trade Ethereum investments by speculating on price swings and hedging risks without handling actual ETH. Regulatory backing from the SEC could improve market trading activity and provide more liquidity for the ETH market. In addition, there might be more interest in the ETH ETF market as institutional traders and investors who were previously uninterested in ETH may be encouraged to buy in. On the other hand, options trading could increase market volatility, making prices more unstable if large investors begin using options to speculate.