SEC Delays Approval of Options Trading on Bitcoin ETFs

The United States Securities and Exchange Commission has just decided to delay a decision on the approval of Bitcoin spot trading options for exchange-traded funds (ETFs). This decision, if accepted, could open the door to attracting more institutional capital into the Bitcoin market.

In a March 6 filing, the Commission extended the deadline for responses from Cboe Exchange and the Miami International Stock Exchange on their bids, which involve the offering of options on the Bitcoin ETF. The decision also delays Nasdaq’s review of bids related to options on BlackRock’s iShares Bitcoin Trust (IBIT). The delay is intended to ensure it has “sufficient time to fully consider” the request, the commission said.

All exchanges applied to list Bitcoin ETF options on January 25, and according to US securities laws, the SEC must make the first decision by March 10, which could delay the maximum. maximum 45 days. Additionally, the SEC’s delay provides an additional 45 days – for a total of 90 days – until a final decision, with an April 24 expiration date.

A highlighted excerpt of the SEC’s filing which cites needing “sufficient time” to decide on allowing Bitcoin ETF options trading. Source: SEC

Options, as derivatives, give traders leverage and the freedom to bet on the direction of market movements.

If a trader believes that the price of Bitcoin will rise, they can adopt an insurance strategy by paying premiums and buying “call options”. This way, they agree to buy 1 BTC at today’s price within a month, but only pay a smaller amount than buying 1 BTC directly.

If the price of Bitcoin increases during the month, traders can leverage their options to buy Bitcoin at a lower price, which can then be sold for a profit. Conversely, if prices fall, they can simply let the policy expire and accept the loss of premiums paid.

Michael Sonnenshein, CEO of Grayscale, has expressed support for the approval of options for the Bitcoin ETF, emphasizing that they “contribute to the strength and health of the market.” Dave Nadig, analyst at VettaFi, also emphasized that when the Bitcoin ETF options market becomes active, there will be “all kinds of hedge fund players in the space” and those who do not want to speculate directly in the cryptocurrency Students will have many opportunities to participate.

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On January 11, the SEC approved 10 Bitcoin spot ETFs, marking the end of a months-long delay. According to data from BitMEX Research dated March 6, traders have poured capital into ETFs, with nine of them converted into ETFs and total assets under management reaching $25.87 billion. except Grayscale.

The SEC is currently facing a decision on seven positions on the Ether ETF. Analysts predict that the agency will delay its decision until May 23 to approve all of VanEck’s application deadlines.

Before the SEC, multiple leveraged Bitcoin ETFs were launched, including 5 ProShares Spot Bitcoin ETFs and 5 Leveraged Bitcoin ETFs, along with 6 REX Shares Leveraged ETFs, which were all filed. by Direxion in January.