The U.S. Securities and Exchange Commission (SEC) has delayed its decision on allowing options trading for Ethereum (ETH) exchange-traded funds (ETFs) on the New York Stock Exchange (NYSE), as stated in a Nov. 8 filing.
The agency cited a need for additional time to evaluate the proposal and its impact on the market. This postponement affects Bitwise’s ETHW, Grayscale’s ETHE and Ethereum Mini Trust, and BlackRock’s ETHA.
Previously, the SEC extended its decision deadline for ETHW and ETHA on Sept. 26, while this marks the first delay for Grayscale’s funds.
Market Analysts Predict April 2025 Decision on Ethereum ETF Options
In August, Bloomberg ETF analyst James Seyffart projected that the SEC’s final decision regarding options on Ethereum ETFs might arrive by April 2025.
The SEC also specified in its filings that stakeholders have 21 days to submit arguments on whether options trading for Ethereum ETFs should be permitted.
Additional Regulatory Approval Required from OCC and CFTC
The filing noted that, even with SEC approval, the Options Clearing Corporation (OCC) must also authorize options trading on these funds. Moreover, final authorization from the Commodity Futures Trading Commission (CFTC) is needed.
Institutional Interest in Options as a Hedging Tool
An options contract is a derivative allowing two parties to agree on buying or selling an asset at a specific price within a designated period, similar to futures contracts. Institutional investors often use options to hedge their positions in the spot market.
Bloomberg senior ETF analyst Eric Balchunas noted that following the approval of Bitcoin ETF options, such instruments attracted increased liquidity and large institutional investors.
Potential for Increased Cash Flow in Ethereum ETFs
Adding options could bring vital cash flow to Ethereum ETFs, which currently report negative net flows of $410 million, as reported by Farside Investors.
The post SEC punts decision on options trading for spot Ethereum ETFs appeared first on CryptoSlate.
