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The U.S. Securities and Exchange Commission (SEC) on Jan. 19 opened comments on proposals related to options trading on Bitcoin ETFs.
One SEC notice concerns a proposed rule change allowing Nasdaq to list and trade options on BlackRock’s iShares Bitcoin Trust. A second SEC notice concerns a proposed rule change that would allow Cboe Exchange Inc. to list and trade options on various Bitcoin exchange-traded products (ETPs).
Though the text of the notice does not indicate which funds the proposal applies to, Cboe BZX is responsible for listing and trading the majority of spot Bitcoin ETFs approved this January, including those from Ark Invest, VanEck, WisdomTree, Invesco, Fidelity, GlobalX, and Franklin Templeton. Options trading would introduce new investment strategies for each fund.
Specifically, this approach would allow investors to engage in leveraged trading, potentially earning greater returns at a higher risk. SEC could decide on approval in coming months Bloomberg ETF analyst James Seyffart commented on the development, noting: “The SEC has already acknowledged the 19b-4’s requesting the ability to trade options on spot Bitcoin ETFs.
This is faster than SEC typically moves. Options could be approved before end of February if SEC wants to move fast?” Seyffart’s other statements indicate the SEC could make its a decision around Feb. 15 at the earliest, or around Sept. 21 at the latest. Seyffart also noted that each proposal was posted on Jan. 16, meaning that the SEC published its latest notices after three days. He said the latest developments are “significantly faster” than other 19b-4 rule change proposals, which reached similar stages after more than 14 days.
The text of each document, however, indicates slightly earlier filing dates for each proposal. Nasdaq (on behalf of BlackRock) filed its proposal on Jan. 9 and submitted an amendment on Jan. 11. Cboe filed its proposal on Jan. 5.
