SEC Holds Off on Cboe's Bid for Bitcoin ETF Options Trading

The SEC has delayed its decision on a request by Cboe to offer options trading for Bitcoin ETFs, with a new deadline set for April. Originally submitted in January, the application seeks to expand trading options but has hit a pause due to regulatory considerations. Cboe's bid to introduce Bitcoin ETF options hinges on approvals from both the SEC and the Options Clearing Corporation (OCC). The application highlights the unique nature of Bitcoin as a commodity, which requires special consideration compared to traditional ETPs (Exchange-Traded Products).

In addition to Cboe's proposal, the SEC is reviewing similar applications from the NYSE and Nasdaq, involving commodity-based shares and a specific Bitcoin Trust ETF by BlackRock. Decisions on these applications have also been postponed to April. BlackRock'sIBIT ETF has seen significant activity, breaking records with over $1.3 billion in trading volume in one day and achieving the highest net inflow among active ETFs, with notable inflows following its approval. This surge in interest drove Bitcoin's price to a new high of $69,170, although it later dropped below $60,000. Currently, Bitcoin is trading above $67,000, nearing its previous peak.

The SEC is also considering proposals for Ether ETFs, with recent delays in decisions for applications from BlackRock and Fidelity. These proposals have sparked a debate over the potential impact on the Ethereum network's validator concentrations. Concerns have been raised about the dominance of large ETFs in the Ethereum network, especially those engaging in staking, potentially exacerbating concentration risks with institutional custodians like Coinbase.