SEC POSTPONES VERDICT ON NYSE’S SPOT BITCOIN ETF OPTIONS PROPOSAL 

The U.S. Securities and Exchange Commission (SEC) has deferred its verdict on the New York Stock Exchange’s (NYSE) proposal to offer options trading on spot Bitcoin exchange-traded funds (ETFs), affecting entities like Grayscale Bitcoin Trust and Bitwise Bitcoin ETF that have Bitcoin holdings on the NYSE.

SEC Extends Review Period for Spot Bitcoin ETF Options Proposal

In a filing dated April 8, the SEC indicated it needs more time to review the proposed rule amendment thoroughly, setting the next decision deadline for May 29. The proposal, initially submitted in February 2024, seeks to amend Rule 915 to permit options trading on certain Bitcoin ETFs, which would enable investors to speculate on Bitcoin’s price movements and utilize hedging strategies through financial derivatives.

This decision follows a similar extension for a request from Nasdaq to offer options trading on BlackRock’s iShares Bitcoin Trust (IBIT) and delays in responses to CBOE and the Miami International Securities Exchange’s applications to list options on spot Bitcoin ETFs earlier in March.

Grayscale’s Push for Spot Bitcoin ETF Options

Grayscale CEO Michael Sonnenshein, advocating for the amendment, submitted a formal request to the SEC, arguing for the logical extension of options trading on spot Bitcoin ETFs. Citing the SEC’s previous approvals of futures and spot ETFs, Sonnenshein emphasized the potential for options trading to foster a more dynamic and healthy market environment in a February 28 letter and a subsequent blog post on February 5.

As the SEC continues to weigh the merits of seven spot Ethereum ETFs, with a decision postponed until May 23—the same day set for VanEck’s ETF application—the broader interest in spot Bitcoin ETFs is evident beyond the U.S. borders. Notably, equity funds based in mainland China have sought to launch spot Bitcoin ETFs via their Hong Kong branches, with Harvest Fund Management’s Hong Kong subsidiary pending approval from Hong Kong’s Securities & Futures Commission (SFC) since January.

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