SEC Prepares to Approve Options for Spot Bitcoin ETFs

• The SEC is seeking public feedback and gearing up to approve a rule change that would allow the listing of Bitcoin exchange-traded funds (ETFs) on exchanges and trading in derivatives.
• The proposed change indicates the possibility of Bitcoin ETF options trading similar to options on other ETFs.
• According to ETF analyst James Seyffart and other experts at Bloomberg, it is estimated that the SEC could make its final decision on the proposed changes by no later than September of this year.

Will the U.S. Securities and Exchange Commission (SEC) approve options trading for BITB and GBTC spot Bitcoin ETFs?

SEC Reviewing Options Applications for BITB and GBTC

The U.S. Securities and Exchange Commission (SEC) is seeking public feedback and preparing to approve a rule change that would allow Bitcoin exchange-traded funds (ETFs) to be listed on exchanges and traded in derivatives. The reason behind NYSE’s move is the demand created by the trading of options in BITB, GBTC, and other funds directly holding Bitcoin.

If the proposal is approved, this event will be a turning point in integrating crypto products into financial markets, as ETFs will not only provide market participants with opportunities to speculate on the price of Bitcoin but also offer new ways for hedging and generating income.

The proposed change indicates the possibility of Bitcoin ETF options trading similar to options on other ETFs, including those based on commodities. This should cover regulatory aspects ranging from listing mechanisms to expiration dates, strike prices, lower price variations, various limits, and customer account maintenance requirements. Alongside Bitcoin ETFs, traditional financial products are also similarly demonstrating increased interest from supporters.

Following the approval of spot Bitcoin ETFs trading on Wall Street on January 10, the SEC will consider the rule change, a move considered historical and compared to cases rejected for years. This evolution may be seen as a move by the regulatory authority to adopt a more crypto-friendly stance and could open the door to broader options for Bitcoin-based investments within the market.

BlackRock, one of the world’s leading asset management companies, has applied for a rule revision alongside the Chicago Board Options Exchange (CBOE) for the listing of such applications as Bitcoin ETFs. This is an example of institutional interest in such products.

According to ETF analyst James Seyffart and other experts at Bloomberg, it is estimated that the SEC could make its final decision on the proposed changes by no later than September of this year. The approval of options trading for Bitcoin ETFs not only provides alternative tools for investors to create more complex trading strategies but also carries the potential to enhance liquidity and price discovery mechanisms for Bitcoin as an asset class.

Grayscale CEO Michael Sonnenshein emphasized the strategic importance of derivative product approvals for the crypto industry, stating that it provides investors with new ways to navigate markets and generate income.

Bitwise CEO Announces Significant Milestone for Bitcoin ETF

Bitwise CEO Hunter Horsely announced a significant milestone for the crypto investment landscape. Bitwise Bitcoin ETF, known as BITB, has become eligible to be recommended by Registered Investment Advisors (RIAs) in one of the largest networks of investment advisors in the U.S. and boasts assets of $30 billion.

This announcement represents a major step in integrating crypto investments into traditional financial advisory services, offering institutional investors and clients a regulated path to include Bitcoin in diversified investment portfolios.