The U.S. Securities and Exchange Commission (SEC) has recently decided to delay its decision on Nasdaq’s proposed rule change regarding the listing and trading of options on BlackRock’s Ethereum ETF, known as the iShares Ethereum Trust (ETHA). This comes shortly after the SEC approved options trading for BlackRock’s iShares Bitcoin Trust (IBIT), a major breakthrough for spot Bitcoin ETFs.
SEC Delays Decision On Ethereum ETF Options
The SEC was initially expected to deliver its decision on September 26th. However, it has now postponed the ruling to November 10th. The regulator stated, “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change,” in a press release on Tuesday.
In a separate filing, the SEC also delayed its decision on NYSE American LLC’s proposal to list and trade options on the Bitwise Ethereum ETF, the Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust. The new deadline for the NYSE American decision is November 11th.
If approved, options on these Ethereum ETFs will follow similar listing and trading rules as other trusts. This includes criteria for underlying securities, expirations, strike prices, and trading halts.
The Significance of Options for Crypto ETFs
Nasdaq International Securities Exchange submitted a filing with the SEC proposing a rule change to list and trade options tied to BlackRock’s Ethereum ETF on August 6th. This initiative aims to broaden the spectrum of investment tools available for Ethereum and make cryptocurrency investments more accessible to traditional investors.
The exchange highlighted that the rule change would offer a cost-effective way for investors to gain exposure to Ether, the second-largest cryptocurrency by market cap. Additionally, it would meet investor needs generally involving hedging and speculation.
Options are invaluable for traders aiming to hedge against potential losses or speculating on the future price of an asset like a stock or an ETF. They provide flexibility by giving the buyer the right to buy or sell an asset at a predetermined price on an agreed date.
Following Nasdaq’s filing, NYSE American also proposed listing and trading options on trusts managed by Grayscale and Bitwise.
Notably, this postponement came just a week after the SEC granted approval for options trading on BlackRock’s iShares Bitcoin Trust. Bloomberg’s senior ETF analyst, Eric Balchunas, described this move as a “huge win” for Bitcoin ETFs, as it is expected to attract significant liquidity and increase participation from larger investors.
Click Here For More Trading tips and strategies.