SEC Delays Decision on NYSE Proposal for Spot Bitcoin ETF Options Trading

The United States Securities and Exchange Commission (SEC) has postponed its decision on the New York Stock Exchange’s proposal to introduce option trading on spot Bitcoin exchange-traded funds (ETFs).

Grayscale Bitcoin Trust and Bitwise Bitcoin ETF are directly affected since they hold BTC on the NYSE.

SEC Delays Decision on Spot BTC ETF Options Trading

The SEC cited in its April 8 filing that it will require a longer time to take action on the suggested rule change so that it has enough time to deliberate on it. Notably, the next deadline for the SEC to delay, approve, or deny the proposed rule change is May 29.

The rule change proposal was submitted to the SEC in February 2024, after which it was opened for public feedback. The proposal would allow trading options on certain Bitcoin ETFs by changing Rule 915.

Options are financial derivatives that allow investors to speculate on the movement of underlying assets, bringing about hedging and leverage.

The same delay decision for Grayscale and Bitwise was given for Nasdaq’s request for options trading on BlackRock’s iShares Bitcoin Trust (IBIT) last month.

In an earlier March 6 filing, the regulator also delayed responding to the CBOE exchange and the Miami International Securities Exchange requests to offer spot Bitcoin ETFs options.

Grayscale CEO Urges SEC for Spot Bitcoin ETF Options

Michael Sonnenshein, the Grayscale CEO, was one of the two people who approached the SEC with a request to have the rule changed on options trading.

In a letter on February 28, Sonnenshein said it only made sense for the SEC to approve options trading on the spot Bitcoin ETFs since the regulator already approved futures and spot ETFs on the NYSE.

In a February 5 post, Sonnenshein wrote that options for spot Bitcoin ETFs could lead to a “robust and healthy market.”

Meanwhile, the SEC is still deliberating on the seven spot Ethereum ETFs after postponing the decision until May 23, the same deadline set for the VanEck ETF application.

Spot Bitcoin ETFs have been on an upward trend this year, attracting attention beyond the United States. Recently, Chinese mainland-based equity funds filed applications to introduce spot Bitcoin ETFs through their Hong Kong subsidiaries. One of the funds, Harvest Fund Management’s Hong Kong branch, has been awaiting approval from the Securities & Futures Commission (SFC) of Hong Kong since January.