The US Securities and Exchange Commission (SEC) has announced that it is going to extend the period of its review for Nasdaq ISE, LLC’s proposed rule change on listing and trading options on iShares Bitcoin Trust. The proposal, first submitted on January 9th was designed to enable the introduction of options in iShares Bitcoin Trust while attracting various responses from people in the financial sector as well as crypto communities.
SEC has postponed feedback
In a March 6 filing, the SEC stretched its time to respond to Cboe Exchange and the Miami International Securities Exchange on their bids to offer options on Bitcoin ETFs. It also delayed deciding on Nasdaq’s bid to offer options on BlackRock’s iShares Bitcoin Trust (IBIT). The delay ensures it has “sufficient time to consider” its request.
Exchanges submitted signed papers requesting permission to list Bitcoin ETF options on Jan 25, and the SEC had its first deadline of March 10, as US securities laws require it up to 45 days ‘to determine whether or not we will grant that extension’.
In doing so, the deferral provides another 45 days, the maximum period permitted under law, for the commission to come up with a final verdict which was indicated as being April 24th by SEC. Options are derivative products that give traders leverage and let them make directional bets on the market.
If one believes that Bitcoin is going up in price then he can choose to pay premium, buy a ‘call option’ and agree upon purchasing one BTC at today’s price after one month while only depositing less money than would be necessary for buying 1BTC.
Grayscale’s challange
Michael Sonnenshein, the CEO Grayscale, last month called for the approval of Bitcoin ETF options, stating that they “contribute to a robust and healthy market.” In January, Dave Nadig who is an analyst at VettaFi told CNBC that once Bitcoin ETF options markets are established, “you will have all types of hedge fund players come into this space.”
Nadig said those who weren’t “speculating on crypto directly in the crypto ecosystem are now going to have some to play with.” On 11th January, the SEC approved ten spot Bitcoin ETFs for trading after several postponements which were due by its final date.
The ETFs have seen massive capital inflows from traders. Data from BitMEX Research as as at 6th March showed that nine of these new ETFs except Grayscale’s (converted to an ETF) had $25.87 bn in assets under management.
Currently, there are seven spot Ether ETF applications before the SEC. Analysts speculate that the agency is holding off until May 23 to approve them all, coinciding with the deadline for VanEck’s application.
