Key Takeaways
- SEC emphasized the necessity for an extended review period to thoroughly evaluate the implications of the proposed rule change.
- The SEC’s next deadline to decide on the proposed NYSE rule change is May 29
The Securities and Exchange Commission (SEC) has announced an extension of its review period concerning the New York Stock Exchange’s proposal to introduce options trading for spot Bitcoin (BTC) exchange-traded funds (ETFs). This development, disclosed on April 8, 2024, directly impacts options trading on assets such as the Bitwise Bitcoin ETF (BITB) and the Grayscale Bitcoin Trust (GBTC) listed on the NYSE.
Crypto options trading offers a key advantage by mitigating traders’ risk. Unlike spot trading, where traders can potentially lose their entire investment if the market goes against them, options trading limits losses to the premium paid for the option if the market moves unfavorably.
In an official filing dated April 8, the SEC explained its decision, stating, “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.”
The regulatory body emphasized the necessity for an extended review period to thoroughly evaluate the implications of the proposed rule change.
As per the SEC’s announcement, the deadline for the agency to either approve, deny, or further delay the NYSE’s proposal is slated for May 29. This extension follows a similar deferral of Nasdaq’s request for options trading on BlackRock’s iShares Bitcoin Trust (IBIT).SEC had then stated tha the delay ensures it has “sufficient time to consider” its request.
In a March 6 filing, the United States security regulator extended its time to respond to CBOE Exchange and the Miami International Securities Exchange on their bids to offer options on Bitcoin ETFs.
Notably, the SEC is currently deliberating on seven spot Ether ETFs. Analysts speculate that a decision on these ETFs may be postponed until May 23, coinciding with the deadline for VanEck’s ETF application. Approval of these ETFs could potentially lead to significant investments in Ethereum (ETH), much like the surge seen in Bitcoin following Bitcoin ETF approvals.
