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Funds awaiting SEC approval include BlackRock’s iShares Ethereum Trust (ETHA), Bitwise’s Ethereum ETF (ETHW), Grayscale’s Ethereum Trust (ETHE), and Ethereum Mini Trust (ETH).
Options trading on the Ethereum spot ETFs has been suspended as the SEC seeks more time to review them. The decision deadlines for these funds were originally set for September 26 and 27, 2024, but the SEC has extended them to November 10 and 11, 2024.
The SEC granted this extension under Section 19(b)(2) of the Securities Exchange Act, which allows the agency the additional time necessary to assess the implications of approving such financial products. For BlackRock’s ETHA fund, the SEC said it needs more time to “thoroughly review the proposed rule changes.”
In July 2024, BlackRock filed a proposal through Nasdaq ISE to trade options for its ETHA fund. Similarly, NYSE American LLC has also filed with Bitwise and Grayscale for approval to trade options for their Ethereum-based ETFs.
The SEC’s cautious approach to Ethereum ETFs comes after the agency approved options trading for a Bitcoin ETF. Last week, BlackRock was granted permission to trade options on the iShares Bitcoin Trust (IBIT). However, the approval comes with strict regulations to minimize the risk of market manipulation.
The introduction of options trading for both Bitcoin and Ethereum spot ETFs has attracted a lot of attention from investors. Options trading gives investors the opportunity to speculate on the price movement of an asset or hedge against potential risks.
Options on spot ETFs provide investors with additional flexibility and risk management tools in volatile markets. Catherine Clay, Executive Vice President and Head of Global Derivatives at CBOE Global Markets, previously highlighted the utility of options trading in the cryptocurrency market. “We believe that options, by providing end-investors with the ability to hedge and define their exposure to Bitcoin, will truly benefit investors and the entire ecosystem,” she said.
