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SEC Initiates Review of Bitcoin Options Trading Impact, Seeks Public Feedback
The United States Securities and Exchange Commission (SEC) initiated a new phase of discussions on April 24 regarding a proposed rule alteration for the trading of options on Bitcoin exchange-traded funds (ETFs) while also inviting public input on the matter.
Multiple exchanges are looking to trade options on the newly approved spot bitcoin ETFs, though they have been met with delays.
Review of Potential Impacts
As outlined in the filing, the SEC will investigate the potential impacts of introducing Bitcoin options trading on the broader market, particularly during periods of market turbulence. The review will scrutinize whether exchanges’ current surveillance and enforcement mechanisms are sufficient to manage the distinctive characteristics of Bitcoin options.
Exchanges Seeking Options Trading
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, as disclosed in the SEC’s filing published on Thursday.
Nasdaq’s application would list and trade options tied to BlackRock’s iShares Bitcoin Trust, while Cboe intends to facilitate options trading across a spectrum of ETPs holding Bitcoin.
Extended Review Period
The SEC has extended the review period for allowing options trading on Grayscale and Bitwise Bitcoin ETFs, with a new decision date set for May 29.
Public Input and Regulatory Considerations
Interested parties are invited to submit their initial comments within 21 days following the official registration of the document, setting the final deadline for May 15. Additionally, rebuttal comments may be submitted until May 29.
The agency 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.
SEC Delays Decision on Options Trading for Bitcoin ETPs
The latest delay follows a previous postponement in the SEC’s decision-making process regarding options trading earlier this month.
Meanwhile, asset management firms such as 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.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
