- The approval of Spot Bitcoin ETF options in the U.S. may experience significant delays in regulatory processes.
- The delay in options for Bitcoin ETFs is due to the absence of a predetermined regulatory process.
- John Roglieri, Vice President of FalconX, emphasized that the industry wants to expand, but the regulatory landscape poses a significant obstacle.
Potential Delays for Spot Bitcoin ETF Options in the U.S.: Latest Developments on the Matter!
Spot Bitcoin ETF Options in the US
The approval of Spot Bitcoin ETF options in the U.S. may encounter prolonged delays in regulatory processes, potentially diminishing the appeal of these products, according to industry experts. The Securities and Exchange Commission (SEC) recently granted approval for Spot Bitcoin ETFs, marking a significant moment for the crypto industry. However, despite having 10 products actively trading since January 11, the introduction of options has stalled due to the absence of an established regulatory framework.
The delay in options for Bitcoin ETFs stems from the lack of a predetermined regulatory process. While the SEC oversees technical rule changes, considering Bitcoin’s commodity status, approval from the Commodity Futures Trading Commission (CFTC) may also be required. Additionally, the CFTC is dealing with jurisdictional and regulatory issues related to products linked to Spot Bitcoin ETFs.
This type of oversight introduces an additional layer of complexity and potential regulatory challenges. The absence of options may pose challenges for large investors in risk management. This potential outcome, as suggested by analysts, could hinder entries into ETFs up to $100 billion and weaken their participation.
Yesha Yadav, a law professor at Vanderbilt University, noted that this obstacle could drive some major investors completely away from the market, according to a Reuters report. Moreover, the delay hampers the crypto industry’s goal of introducing more innovative crypto products to the market and acts as a gatekeeper for regulatory approval.
John Roglieri, Vice President of FalconX, highlighted the industry’s desire to expand but emphasized that the regulatory landscape is a significant hurdle. He stated, ‘The markets want to go there, but regulators are gatekeepers.’ Additionally, it is crucial to note that this dual regulatory involvement is not uncommon, even if it is not frequent.
When Will Spot Bitcoin ETF Options Be Approved?
The current situation may reflect a timeline similar to SPDR Gold Shares ETF-related options taking more than three years for CFTC approval. Specifically, regulators did not approve options applications for platinum and palladium ETFs in 2010. Martin Leinweber, a digital asset product strategist, predicts that the approval process could take between 2 to 10 months.
Nasdaq, CBOE, and NYSE Arca applied for SEC approval in January and are expecting to list options in the later part of 2024. However, the Options Clearing Corporation (OCC) is awaiting CFTC approval due to its responsibility for clearing options.
The OCC is engaging in discussions with regulators about the necessary approvals but refrains from commenting on a potential timeframe. Additionally, exchange executives and CFTC officials are expected to meet soon to discuss the matter.
Adam Sze, Digital Asset Product Head at Global X, stated that a delay in options is not surprising, considering that SEC approval for Bitcoin ETFs has taken over a decade. He also mentioned, ‘A few months for listed options is not that long when you look at the big picture.’
