The US Securities and Exchange Commission (SEC) has announced a delay in its decision to allow options trading for BlackRock and Bitwise’s spot Ethereum (ETH) exchange-traded funds (ETFs) until mid-November. The new deadlines for BlackRock and Bitwise are Nov. 10 and Nov. 11, respectively. The SEC stated it needed more time to consider the proposal and extended the initial 45-day review period that would have ended on Sept. 26 for BlackRock since Nasdaq filed for the rule change for the iShares Ethereum Trust ETF on July 22. The same reasoning was applied to Bitwise’s ETHW, which had its decision date delayed to Nov. 11 since the proposed rule change was filed one day after BlackRock’s.
Options trading is a significant development for crypto ETFs, as it provides more liquidity and attracts institutional investors. BlackRock’s iShares Bitcoin Trust (IBIT) recently received clearance for options trading from the SEC on Sept. 20, which was considered a “huge win” for Bitcoin (BTC) ETFs by Bloomberg senior ETF analyst Eric Balchunas. This move is expected to bring more “big fish” into the market. As per a report by K33 Research on Sept. 24, Bitcoin’s derivatives market is 279x smaller than its equity and commodity counterparts. The Bitcoin options volume traded on the top five centralized crypto exchanges was about $33.3 billion between Sept. 1 and Sept. 22, while Ethereum options’ volume in the same period was significantly lower at just $9.2 billion. This indicates that there is a lot of potential for growth in Ethereum ETFs with the addition of options trading by the SEC.
The delayed decision by the SEC to allow options trading for BlackRock and Bitwise’s spot Ethereum (ETH) exchange-traded funds (ETFs) indicates a cautious approach by the regulatory body towards this new asset class. The extended deadline for the two ETFs shows that the SEC needs more time to thoroughly review the proposals and consider all aspects before making a decision. This delay may have a short-term impact on the market sentiment, as investors were eagerly awaiting a decision on these ETFs. However, in the long run, this delay could result in a more informed and well-thought-out decision by the SEC, which could benefit the overall market and investors.
The approval of options trading for BlackRock’s iShares Bitcoin Trust (IBIT) by the SEC on Sept. 20 was seen as a significant milestone for Bitcoin (BTC) ETFs. This move is expected to bring more liquidity to the market and attract institutional investors, which could further validate Bitcoin as a legitimate asset class. The SEC’s decision to allow options trading for IBIT could set a precedent for other crypto ETFs, including Ethereum ETFs. The addition of options trading for crypto ETFs could potentially open up new opportunities for investors and increase the overall market participation in this asset class. This could lead to further growth and adoption of cryptocurrencies in the traditional financial sector.
The lower trading volume of Ethereum options compared to Bitcoin options highlights the potential for growth in Ethereum ETFs with the addition of options trading. The disparity in trading volume between the two assets suggests that there is a significant opportunity for Ethereum ETFs to attract more investors and increase market participation. The approval of options trading for Ethereum ETFs by the SEC could level the playing field and provide a much-needed boost to the Ethereum market. This move could potentially bridge the gap between Bitcoin and Ethereum in terms of market participation and liquidity. Overall, the addition of options trading for Ethereum ETFs holds immense potential for the future growth and development of the cryptocurrency market.
