Bottlenecks With Spot Bitcoin ETF-Listed Options
Grayscale CEO Michael Sonnenshein is advocating for the development of listed options for spot Bitcoin ETFs. Currently, Grayscale’s Bitcoin ETF, GBTC, is not available as a listed option due to the absence of listed options in the Over-the-counter (OTC) market.
Options for Increased Purchasing Power and Risk Hedging
Listed options are valuable for both retail traders and institutional investors. They provide a cheaper way for traders to increase their purchasing power and act as an efficient risk hedging tool for institutions. Additionally, listed options contribute to market health, price discovery, and income generation.
The Regulatory Challenge for Listed Options
The main challenge in offering listed options for spot Bitcoin ETFs is the lack of an established regulatory process. The U.S. SEC is responsible for supervising the required technical rule change before exchanges can list options. However, Bitcoin’s classification as a commodity adds complexity as it also requires approval from the Commodity Futures Trading Commission (CFTC). The jurisdictional issues surrounding cryptocurrencies further complicate the process.
Despite these challenges, NYSE and other national exchanges have submitted proposals to amend listing standards to allow options on commodity-based ETFs like spot Bitcoin ETFs.
GBTC Leading the Market
GBTC continues to dominate the spot Bitcoin ETF market with high trading volumes. On its 16th trading day, GBTC recorded a volume of $338 million. BlackRock is also emerging as a strong competitor in this space.
Hot Take: Advocating for Listed Options in Spot Bitcoin ETFs
Michael Sonnenshein’s call for the development of listed options in spot Bitcoin ETFs reflects the need for a more robust and inclusive market. Listed options would provide greater opportunities for traders and investors while contributing to the overall health and efficiency of the crypto ecosystem. Despite regulatory challenges, the industry is making progress towards introducing listed options, as evidenced by the submission of proposals by major exchanges. The competition among spot Bitcoin ETF providers is intensifying, highlighting the growing demand for these investment products.
By
By
By
By
By
By