The United States Securities and Exchange Commission (SEC) has deferred its decision on approving options trading for spot Bitcoin exchange-traded funds (ETFs), potentially paving the way for increased institutional investment in Bitcoin.
In a filing on March 6, the SEC extended its response time to Cboe Exchange and the Miami International Securities Exchange regarding their proposals to offer options on Bitcoin ETFs. The agency also postponed deciding on Nasdaq’s bid to provide options on BlackRock’s iShares Bitcoin Trust (IBIT), citing the need for sufficient time to consider the requests.
The exchanges submitted their filings on January 25, with the SEC facing its initial decision deadline on March 10, under U.S. securities laws. The deferral grants the SEC an additional 45 days, reaching the maximum 90-day period mandated by law, with the final decision expected by April 24.
Options are financial derivatives that offer traders leverage, allowing them to make directional bets on the market. For instance, traders can purchase “call options” if they anticipate Bitcoin’s price to rise, potentially profiting if the price increases.
Grayscale CEO Michael Sonnenshein advocated for the approval of options for Bitcoin ETFs, highlighting their potential to enhance market liquidity and health. Analysts anticipate increased participation from hedge fund players once Bitcoin ETF options markets become operational.
The SEC approved 10 spot Bitcoin ETFs for trading on January 11 after months of deliberation. These ETFs have garnered substantial assets under management, indicating investor interest in the Bitcoin market.
The SEC is also reviewing seven spot Ether ETFs, with analysts speculating on approval by May 23, coinciding with VanEck’s application deadline. Additionally, multiple leveraged Bitcoin ETFs are awaiting SEC approval, including proposals from Direxion, ProShares, and REX Shares
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