SEC Postpones Decision on Ethereum ETF Options Until December 3

• The SEC has delayed its decision on Ethereum spot ETF proposals until December 3, 2024.
• Interest in crypto derivatives among institutional investors is increasing, with more advisors integrating options into portfolios.
• Bitcoin spot ETFs recorded a notable net inflow of $253.6 million, contrasting with a slight outflow from Ethereum ETFs.

The anticipation surrounding the Ethereum spot ETF options mounts as the U.S. Securities and Exchange Commission (SEC) has decided to delay its ruling. This decision, detailed in an October 11 filing, moves the resolved date from the expected October 19 to December 3. This postponement signifies yet another instance of the SEC deferring judgments regarding options connected to Ethereum spot exchange-traded funds (ETFs).

SEC Postpones Ethereum ETF Options Decision

The SEC’s recent announcement highlights that the Commission once more postponed its verdict on whether to permit the Cboe Exchange to list options linked to several Ethereum spot ETFs. This proposal involves renowned industry leaders like BlackRock’s iShares Ethereum Trust ETF and Grayscale Ethereum Trust. The delay echoes a similar decision in September, where Nasdaq’s application to list options on the iShares Ethereum Trust was also postponed.

These delays are not isolated occurrences. In contrast, the SEC has already approved Nasdaq to list options tied to BlackRock’s Bitcoin ETF, iShares Bitcoin Trust (IBIT). However, further approvals are awaited from the Commodity Futures Trading Commission (CFTC) and the Options Clearing Corporation (OCC), with the full launch expected by the first quarter of 2025.

James Seyffart, an analyst at Bloomberg Intelligence, suggested that while Bitcoin ETF options might roll out by the end of 2024, the start of 2025 is a more likely timeframe. “The end of the year is possible for options, but more likely in Q1 2025,” Seyffart mentioned on October 9.

Rising Interest in Crypto from Institutional Investors

The lure of crypto options is drawing traditional finance players. Financial advisors, who handle a substantial sector of the $9 trillion ETF market, are increasingly using options to hedge portfolios. A 2023 survey by The Journal of Financial Planning revealed that over 10% of financial advisors actively incorporate options into their client portfolios.

This trend, coupled with the surge in Bitcoin spot ETF inflows, indicates a burgeoning interest among institutional investors for regulated cryptocurrency derivatives. On October 11, Bitcoin spot ETFs reported a net inflow of $253.6 million, whereas Ethereum spot ETFs experienced a slight outflow of $0.1 million.

According to Spotonchain, a significant net flow rebound was observed on the last trading day of the week following three consecutive days of outflows. The total net flow for Bitcoin ETFs this week was positive at $348.7 million, with inflows recorded on two of the five trading days.

BlackRock’s iShares Bitcoin Trust (IBIT) led the weekly inflows with $140.7 million, adding a net 2,229 BTC. IBIT’s cumulative net inflow now stands impressively at $18.84 billion after 190 trading days.

Conversely, Ethereum ETFs faced a more challenging week, garnering just $1.9 million in inflows over the past five trading days. The cumulative net inflow for Ethereum ETFs after 58 trading days is at -$551 million.

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