American Regulators Delay Decision on Bitcoin ETF Options
Once again, American regulators have pushed back a decision on whether to allow options on spot bitcoin ETFs. This delay of 45 days by the Securities and Exchange Commission (SEC) is significant for the crypto market as it waits to see if the New York Stock Exchange will be able to list options on spot bitcoin ETFs. The NYSE’s proposal covers two specific spot bitcoin ETFs – Bitwise Bitcoin ETF and the Grayscale Bitcoin Trust – as well as any other trust that holds Bitcoin.
Regulator’s Notice and Process
The SEC’s notice on May 29, 2024, stated that the Commission must either approve, disapprove, or initiate proceedings to determine the fate of spot bitcoin ETF options. The NYSE’s filing on Feb. 9 requested permission from the SEC to trade these options. As an SRO, the NYSE was mandated to file for a rule change and allow public input before the SEC could make a decision.
- The SEC had 45 days to consider comments and decide on the proposal.
- If a decision was not reached within the initial 45-day period, a further 45-day delay could be implemented.
- In this case, the regulator has opted to delay its decision further.
Public Comments and Feedback
Despite the significance of the proposal, only two public comments were submitted. One came from Grayscale CEO Michael Sonnenshein, while the other was from Prof. James Angel of Georgetown University. Prof. Angel’s 13-page letter criticized the SEC’s approach to bitcoin ETFs and questioned its focus on regulatory matters.
- Angel highlighted the existence of options on other bitcoin futures ETFs, such as ProShares Bitcoin Strategy and leveraged 2x Bitcoin Strategy.
- Open interest data on BITO and BITX options were cited to underscore the demand in the market.
- The comparison with options on the SPDR Gold Shares ETF, GLD, further emphasized the potential scale of options trading on spot bitcoin ETFs.
Implications for the NYSE and Market
The possibility of introducing options trading on spot bitcoin ETFs could have far-reaching implications for the NYSE and the broader crypto market. Should this proposal be approved, it could pave the way for increased liquidity, trading volume, and activity surrounding cryptocurrency options. This move could also attract more traditional investors to the crypto space, further legitimizing digital assets in the eyes of institutional players.
Hot Take: What Comes Next for Bitcoin ETF Options?
American regulators have once again extended the decision-making process regarding options on spot bitcoin ETFs. With the potential approval of these options, the NYSE could see a significant uptick in trading activity and interest from investors in the crypto market. This delay underscores the complexities and uncertainties surrounding the regulatory environment for digital assets, highlighting the need for clear and consistent guidelines to foster innovation and growth within the crypto space.
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