SEC Delays Decision on Ethereum ETF Options to November

The U.S. Securities and Exchange Commission (SEC) has delayed its decision on options trading for several spot Ethereum ETFs until November 2024. BlackRock, Grayscale, and Bitwise are among the firms awaiting approval for their Ethereum ETFs.

This delay comes after the SEC recently approved options trading for BlackRock's spot Bitcoin ETF. On September 23, 2024, the SEC announced that it would extend its review of BlackRock’s iShares Ethereum Trust (ETHA), Bitwise’s Ethereum ETF (ETHW), Grayscale’s Ethereum Trust (ETHE), and its Ethereum Mini Trust (ETH).

The funds originally faced deadlines on September 26 and 27, 2024, but the SEC has now pushed these deadlines to November 10 and 11, 2024. This extension follows Section 19(b)(2) of the Securities Exchange Act, which allows the SEC to take extra time if further evaluation is required. For BlackRock’s iShares Ethereum Trust, the SEC stated it needed “sufficient time to consider the proposed rule change.” BlackRock had filed its proposal in July 2024, with the Nasdaq ISE exchange, while Bitwise and Grayscale made similar filings via NYSE American LLC.

The SEC’s cautious approach to Ethereum ETFs comes after its approval of options trading for Bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT). That approval came with strict conditions aimed at limiting market manipulation. The delay in deciding on Ethereum ETFs underscores the importance of fully evaluating the risks and implications of these financial products before approving them.

There has been growing interest in options trading for both spot Bitcoin and Ethereum ETFs. Options trading allows investors to speculate on price movements or hedge against potential losses, providing more flexibility in volatile markets. Catherine Clay, Executive Vice President of CBOE Global Markets, emphasized the benefits of options trading, stating it offers risk management and downside protection for crypto investors.