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Bitcoin ETF Options Trading Now Postponed By SEC For Closer Review

Key Points:

The U.S. SEC has delayed its decision to allow trading for Bitcoin ETF options on the NYSE.
The postponement aims to give the SEC more time to thoroughly consider the proposed rule change, with a new decision date set for May 29, 2024.
Despite approval for Bitcoin futures ETFs, the fate of options-trading ETFs remains uncertain.

The U.S. Securities and Exchange Commission (SEC) has extended its decision timeline regarding the potential introduction of options trading for spot Bitcoin Exchange-Traded Funds (ETFs) on the New York Stock Exchange (NYSE).

SEC Delays Decision on Bitcoin ETF Options Trading

This delay, disclosed in an April 8 filing, impacts proposals from Bitwise and Grayscale, among others holding Bitcoin.

The postponement affects options trading for the Bitwise Bitcoin ETF (BITB), the Grayscale Bitcoin Trust (GBTC), and other Bitcoin-holding trusts on the NYSE. The SEC cited the need for more time to thoroughly review the proposed rule change, with the new decision date set for May 29, 2024.

The proposal seeks to amend Rule 915 to permit specific Bitcoin ETF options, enabling investors to speculate on price movements and employ various strategies such as leverage and hedging. However, the SEC’s cautious approach toward integrating Bitcoin-related products into traditional financial markets is evident in its decision to extend the evaluation period.

Advocates Push for Approval Amidst Uncertainty

Bitcoin ETF options trading has been a widely discussed topic, with proponents arguing that it would enhance market liquidity and offer additional investment alternatives. Grayscale CEO Michael Sonnenshein has supported this move, asserting its potential to bolster market health.

Despite the approval and listing of Bitcoin futures ETFs on the NYSE by the Commodity Futures Trading Commission (CFTC), the fate of options-trading ETFs remains uncertain. Sonnenshein contends that since the SEC has already approved Bitcoin futures ETFs and spot Bitcoin ETFs on the NYSE, there’s no reason to withhold approval for Bitcoin ETF options.

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Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.