The Securities and Exchange Commission (SEC) postponed a decision on February 7 on whether to approve options trading on Ethereum (ETH) Exchange-Traded Funds (ETF) and review period was April 9. It has been extended to this.
The decision, outlined in the February 7th filing, will affect proposals related to Bitwise's ETHW, Grayscale's Ethe and Ethereum Mini Trust, and BlackRock's ETHA.
The SEC cited the need for additional time to evaluate proposals and assess potential market impacts. The regulator has now postponed that decision three times, with the first two being September 2024 and November 2024.
The committee has invited public comments for the next 21 days, allowing market participants to submit discussions against supporting or approving the Ethereum ETF option.
Beyond SEC approvals, Options Clearing Corporation (OCC) must also provide approval with the Commodity Futures Trading Commission (CFTC) before commences trading.
Much-needed tools
An optional agreement is a financial derivative that allows buyers and sellers to agree to buy or sell assets at a given price within a specified time frame. Similar to futures contracts, institutional investors often use optional contracts for hedging and risk management.
Bloomberg Senior ETF Analyst Eric Balkunas Previously, he said the availability of options tends to attract greater liquidity and institutional investors, known as “big fish” in the market.
The launch of options on the Spot Bitcoin (BTC) ETF was a star. By noon, BlackRock's volume of IBIT options trading debut It reached $1.6 billion. Baltuna was called “ton” on the first day.
Despite their outstanding start, the position limit for the option contracts for Spot Bitcoin ETF is 25,000, well below the fair amount of 400,000, based on estimates shared by the Bitwise Head of the Alpha Strategy.
Recently NASDAQ Submit to submit The contract is limited to 250,000, and the risk that can be exercised equals a 2.89% risk, but it is still below the substantial amount estimated by the Park.
If approved, the Ethereum option could face similar regulatory restrictions.
It is mentioned in this article
