SEC Postpones Bitwise and Grayscale Bitcoin ETF Decision

In a recent development, The United States securities regulator has delayed its decision on whether to allow the New York Stock Exchange (NYSC) to offer options trading on spot Bitcoin (BTC) ETFs. This move will directly impact the trading strategies involving the Bitwise Bitcoin ETF and the Grayscale Bitcoin Trust. It will also affect any other trusts that hold BTC listed on the NYSE.

On April 8, 2024, the SEC announced the extension of its review period for the proposed rule change to allow options trading on Bitcoin ETFs. The Commission believes it is reasonable to provide a longer period for taking action on the proposed rule change so that it has enough time to evaluate it,” the securities regulator said.

The next deadline for the SEC to approve, deny, or delay the proposed rule change on the NYSE is May 29. This delay aligns with a similar determination made last month regarding a petition from Nasdaq. Nasdaq sought permission to trade options on BlackRock’s iShares BTC Trust.

Bitcoin ETF Options Proposal

The proposal aims to modify Rule 915 to permit the listing and trading options on specific Bitcoin ETFs, such as the Bitwise Bitcoin ETF and Grayscale BTC Trust. Options are financial derivatives that allow investors to bet on the direction underlying assets will move. They enable leverage and hedging methods.

The proposal was submitted to the SEC on February 9, 2024, and then published for public comment. The SEC’s declaration to prolong the evaluation period indicates a careful attitude toward supervising advanced financial instruments linked to cryptocurrencies.

The possibility of Bitcoin ETF options trading is a much-discussed topic in both the financial and crypto communities. Accepting such a proposal would represent a breakthrough in integrating digital assets into classical financial markets. It would also provide proper tools for risk management and reflection of market views.

In his letter to the SEC, Grayscale’s CEO, Michael Sonnenshein, argued for the natural evolution of considering options on spot Bitcoin ETFs. He mentioned the approval of BTC futures ETFs and spot Bitcoin ETFs as a precedent.

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