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SEC Seeks Comments on Bitcoin ETF Options

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SEC Seeks Comments on Bitcoin ETF Options

The United States Securities and Exchange Commission (SEC) has put out a request for public comments on a proposed rule change that would allow the listing and trading of options for Bitcoin exchange-traded funds (ETFs). The New York Stock Exchange (NYSE) submitted a request to make a rule change that would permit the listing and trading of options on the Bitwise Bitcoin ETF (BITC), the Grayscale Bitcoin Trust (GBTC), and any other trust that holds Bitcoin. If this change is approved, the options would be traded in the same way as options on other ETFs and would be subject to various regulations and criteria.

BlackRock, a major asset manager, is also seeking approval for a similar policy change. The company has filed for rule revisions in order to list options on its Bitcoin ETF in partnership with the Chicago Board Options Exchange (CBOE). Bloomberg ETF analyst James Seyffart estimates that the SEC’s decision on this matter could come by September 2024 at the latest.

Options are financial derivatives products that investors can use for a variety of purposes, such as portfolio hedging, generating income, or speculating on price movements. They give the buyer the right, but not the obligation, to buy or sell a specific asset at a predetermined price on a specific date. In the context of Bitcoin ETFs, options would allow investors to hedge or speculate on the price movements of the ETF itself rather than the underlying Bitcoin.

The SEC has previously approved the trading of commodity ETFs held by trusts, such as the SPDR Gold Trust, iShares COMEX Gold Trust, iShares Silver Trust, and ETFS Gold Trust. The NYSE has stated that its current surveillance procedures are sufficient to monitor the trading of options on Bitcoin ETPs and detect any rule violations. They have also promised to implement any necessary new surveillance procedures.

Grayscale CEO Michael Sonnenshein has publicly supported the approval of crypto derivatives products like options. He believes that options are beneficial for investors as they help with price discovery and allow for better navigation of market conditions or the achievement of desired outcomes, such as income generation. It is important to note that options trading, like any other investment, carries certain risks and may not be suitable for all investors.

The SEC recently approved the trading of spot Bitcoin ETFs on Wall Street on January 10, after previously denying such requests for several years.

9 thoughts on “SEC Seeks Comments on Bitcoin ETF Options

  1. The SEC’s decision on options trading for Bitcoin ETFs could come by 2024? Are they serious? By then, the market could be in shambles. We need decisive action and clear regulations now, not in three years!

  2. Options trading for Bitcoin ETFs? Seriously? This is just another example of Wall Street trying to profit off the cryptocurrency hype while leaving everyday investors vulnerable to even greater risks.

  3. I’m appalled that they’re even considering options trading for Bitcoin ETFs. This is not what cryptocurrencies were intended for. It’s time for the SEC to focus on protecting investors, not indulging in risky financial products.

  4. Great, just what we need – more complexity and speculation in the already volatile world of Bitcoin. Options trading for Bitcoin ETFs will only benefit the big players, while putting smaller investors at even greater risk.

  5. Options trading for Bitcoin ETFs? Are they out of their minds? This is just asking for trouble. The SEC needs to think about the potential consequences before making such a decision.

  6. Options on Bitcoin ETFs? This is a terrible idea! We need more regulation and transparency in the cryptocurrency market, not more complex financial instruments that only benefit the big players.

  7. Options trading for Bitcoin ETFs can provide investors with more flexibility and tools for portfolio hedging. This is a positive step towards a mature and diverse crypto market.

  8. This is a terrible idea! Opening up options trading for Bitcoin ETFs will only increase the volatility and risk associated with these already risky assets.

  9. Of course, it’s important to note that options trading carries risks, and investors need to be aware and make informed decisions. Education and caution should always be a priority. 👓⚖️

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