The decision by the United States Securities and Exchange Commission (SEC) to approve options trading on spot Bitcoin exchange-traded funds (ETFs) has been postponed. The SEC extended the response deadline for bids from the Cboe Exchange and the Miami International Securities Exchange, both seeking to offer options on Bitcoin ETFs. Additionally, the decision on Nasdaq’s bid to offer options on BlackRock’s iShares Bitcoin Trust (IBIT) has been delayed, with the SEC citing the need for more time to review the request.
The filing deadline for Bitcoin ETF options was January 25, and the SEC’s initial decision deadline was March 10. However, the SEC invoked its right to defer a decision, granting an additional 45 days under U.S. securities laws. Consequently, the SEC now has until April 24 to make a final decision on options trading for Bitcoin ETFs.
Options, as derivative products, provide traders with leverage, enabling them to make directional bets on the market. For instance, traders can purchase a “call option” if they anticipate Bitcoin’s price will rise, allowing them to buy 1 BTC at today’s price in a month’s time, while putting down a smaller amount of money compared to outright buying 1 BTC. If Bitcoin’s price increases during that month, the trader can exercise their option, potentially selling it for a profit. Conversely, if Bitcoin’s price declines, the trader may choose to let the option contract expire, forfeiting the premium paid.
Grayscale CEO Michael Sonnenshein has voiced support for the approval of options for Bitcoin ETFs, citing their potential to contribute to a robust and healthy market. Analysts, like VettaFi’s Dave Nadig, anticipate that the introduction of Bitcoin ETF options will attract hedge fund players, providing them with an opportunity to engage in the market.
In addition to options trading, the SEC is assessing seven spot Ether ETFs, with speculation that approval may occur by May 23, coinciding with the deadline for VanEck’s application. Furthermore, the SEC is reviewing multiple leveraged Bitcoin ETFs, including filings from asset manager Direxion, ProShares, and REX Shares.
SEC Commissioner Hester Peirce recently discussed the regulatory approach to cryptocurrencies, highlighting the agency’s “enforcement-only mode” and the need for clearer regulatory guidelines. Peirce emphasized that establishing clear rules upfront would be more effective in distinguishing between good and bad behavior in the cryptocurrency industry, rather than relying solely on enforcement actions.
