The US Securities and Exchange Commission (SEC) has recently announced that it will be delaying its decision on allowing options trading for BlackRock and Bitwise’s spot Ethereum exchange-traded funds (ETFs) until mid-November. This news comes after the approval of options trading for BlackRock’s iShares Bitcoin Trust (IBIT) on September 20, marking a significant development in the cryptocurrency market.
SEC Delays Decision on Ethereum ETF Options Trading
Despite the approval of options trading for IBIT, the SEC stated that it needed more time to consider the implications of allowing options trading for Ethereum ETFs. The new deadlines for BlackRock and Bitwise have been set for November 10 and November 11, respectively.
The decision to delay the approval of options trading for Ethereum ETFs comes after Nasdaq filed for a rule change for the iShares Ethereum Trust ETF on July 22. The SEC extended the initial 45-day review period, which was set to end on September 26, to allow for more thorough consideration of the proposal.
Implications for the Cryptocurrency Market
Options trading is a significant development for cryptocurrency ETFs, as it provides investors with more flexibility and opportunities to hedge their investments. The approval of options trading for IBIT was seen as a “huge win” for Bitcoin ETFs by Bloomberg senior ETF analyst Eric Balchunas. He believes that it will attract more liquidity and institutional investors, known as “big fish”, to the market.
Matthew Sigel, head of digital assets research at VanEck, shared a report by K33 Research that highlighted the disparity between Bitcoin’s derivatives market and its equity and commodity counterparts. The report revealed that the Bitcoin options volume traded on the top five centralized crypto exchanges totaled $33.3 billion between September 1 and September 22, significantly higher than Ethereum’s options volume during the same period.
Potential for Growth in Ethereum ETFs
With Ethereum options volume amounting to just $9.2 billion in the same period, there is a significant opportunity for growth in Ethereum ETFs with the addition of options trading. The SEC’s decision to delay the approval of options trading for Bitwise’s ETHW until November 11 indicates that they are carefully considering the implications of this new development.
Overall, the delay in approving options trading for BlackRock and Bitwise’s spot Ethereum ETFs reflects the SEC’s cautious approach to regulating the cryptocurrency market. While the approval of options trading for IBIT was a positive step for Bitcoin ETFs, the decision to delay the approval for Ethereum ETFs shows that regulators are taking their time to ensure that all risks are properly assessed before allowing options trading in this market.
