The US SEC delays making a decision regarding Bitcoin ETF choices.
Once more, the U.S. SEC has delayed making a decision regarding applications for Bitcoin ETF options.
In a recent filing, the SEC stated that it was waiting for public feedback before deciding to start options trading on the Bitcoin ETF. Comments and rebuttals must be submitted, according to the SEC, within the following 21 and 35 days, respectively.
“Whether options on the specified Bitcoin ETPs should be subject to the same position limits as options on stock, and whether the available supply in the markets for bitcoin should be considered in establishing position limits for options on Bitcoin ETPs.”
SEC filing
A few exchanges, notably Cboe Exchange, Inc., BOX Exchange LLC, MIAX International Securities Exchange LLC, Nasdaq ISE, LLC, and NYSE American LLC, have submitted applications to permit options trading on the recently approved spot Bitcoin ETFs.
Additionally, the SEC postponed reviewing Bitwise and Grayscale’s petitions to introduce Bitcoin options ETFs in April. The regulatory body deemed it suitable to allocate an extended timeframe for implementing the suggested regulation modification. The SEC has until May 29th to decide whether to approve or postpone the introduction of options-based ETFs.
In February, Grayscale CEO Michael Sonnenshein announced the need to launch an options market for spot Bitcoin ETFs. Sonnenshein expressed confidence that this product will benefit both retail and institutional investors.
According to Sonnenshein, companies have a long way to go before the SEC approves this investment product. In terms of complexity, he compared it to launching cryptocurrency ETFs themselves.
Accordingly, the SEC has designated May 29 as the date by which it “shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change,” the SEC said.
James Seyffart, an ETF research analyst at Bloomberg Intelligence, said the delay was “mostly expected at this point.” Ultimately, however, Seyffart said he believes options on spot bitcoin ETFs are likely to be approved.
“I personally think they will ultimately be approved because there is a lot of firepower behind them,” Seyffart said. “Namely, the issuers like BlackRock, Fidelity (investments), Invesco and others.”
The SEC had received two comments on the proposed rule change, the notice noted. In a February comment letter, Grayscale Investments CEO Michael Sonnenshein expressed support for the proposed rule change.
The SEC, having allowed the listing of options on bitcoin futures ETFs and having approved the listing of spot bitcoin exchange-traded products on NYSE Arca and other SEC-regulated national securities exchanges, “should approve the exchanges’ applications to list options on spot bitcoin exchange-traded products,” Sonnenshein’s letter said.
James J. Angel, an associate professor of finance at Georgetown University’s McDonough School of Business, also submitted a comment letter.
“There is no reason for the SEC to delay approval of options on spot bitcoin ETFs,” Angel said in the March letter, which also asked the commission: “Don’t you have better things to do than waste time through extended navel-gazing on these rule filings?”
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