The U.S. Securities and Exchange Commission (SEC) has postponed its decision regarding the inclusion of options trading for Bitcoin exchange-traded funds (ETFs) proposed by Grayscale and Bitwise.
In the SEC’s latest filing on April 8, it was revealed that the Commission has opted for an extended review period for the applications submitted by Grayscale and Bitwise to enable trading options for their Bitcoin ETFs.
The filing states, “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change.”
According to Section 19(b)(2) of the Act, the SEC has set May 29, 2024, as the new deadline by which it will either approve, disapprove, or initiate proceedings to determine whether to disapprove the applications.
On Jan. 10, the SEC approved 11 Bitcoin ETFs as the inaugural batch, which were listed on the New York Stock Exchange (NYSE) and Nasdaq. These ETFs expanded cryptocurrency accessibility for the public, offering new investment avenues.
The SEC had previously postponed its decision on Bitcoin ETF options trading in March 2024, affecting proposals from Cboe Exchange Inc. and Nasdaq ISE. These proposals aimed to introduce options linked to ETFs holding Bitcoin and BlackRock’s iShares Bitcoin Trust, respectively.
The SEC’s cautious approach toward regulating crypto-related products is evident in its careful consideration of these postponements. The deferred applications sought to introduce derivatives enabling traders to speculate on future gains or hedge against potential losses.
Through options trading, investors can enter contracts with other parties, typically facilitated by exchanges, to purchase a specific asset—such as spot Bitcoin ETFs—at a predetermined price on a future date, regardless of the market price at that time, by paying a premium.