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US Representatives Advocate for Options Trading on Bitcoin ETPs
US Representatives Mike Flood and Wiley Nickel are urging the U.S. Securities and Exchange Commission (SEC) to approve options trading on spot bitcoin exchange-traded products (ETPs). They are calling on SEC Chair Gary Gensler to address the delay in this approval process.
Importance of Options Trading on Bitcoin ETPs
- Flood and Nickel highlight the significance of explaining the perceived difference in treatment between options for Bitcoin futures ETFs, which are already trading, and options for spot Bitcoin ETPs.
- They reference the SEC’s January approval of spot bitcoin ETFs, pointing out the substantial investments these products have attracted since their introduction.
Request for Approval and Regulatory Challenges
In their letter to the SEC, Flood and Nickel stress the necessity of options trading for investors and question the delay in approving options on spot bitcoin ETFs. They emphasize the critical role options trading plays in providing risk management tools and additional investment strategies for investors.
The lawmakers raise concerns about the SEC’s indecisiveness towards ETFs and highlight the need for clarity and consistency in regulatory decisions related to cryptocurrency financial products.
SEC’s Review Process and Timeline
The SEC has delayed the decision on options trading for spot Bitcoin ETFs, with a recent extension of the decision-making timeline regarding proposals by Grayscale and Bitwise. The Commission is currently conducting consultations on a proposed rule change, indicating a potential shift in regulatory stance towards Bitcoin options trading.
Multiple exchanges have sought to enable options trading on approved spot bitcoin ETFs, but the process has faced delays as the SEC reviews the impact of introducing Bitcoin options trading on market stability and efficiency.
The SEC has set a new deadline of May 29, 2024, for a decision on options trading for Bitcoin ETFs, following previous postponements that reflect the SEC’s cautious approach to regulating crypto-related financial 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.
