According to Blockworks, the Securities and Exchange Commission (SEC) has delayed its decision on allowing Cboe to list and trade options on bitcoin ETFs. Cboe first applied for this in January, and the SEC has now postponed the decision until late April. Options can be used to hedge risk, enabling parties to enter into contracts to buy or sell a financial product at a specific price within a specified time frame.
Cboe did not immediately respond to a request for comment on the delay. Generally, CBOE can offer options three days after an ETP begins trading on a national securities exchange like Nasdaq or the New York Stock Exchange. However, these rules do not apply to ETPs holding commodities such as Bitcoin. Cboe stated earlier this year that in addition to its rule filing receiving SEC approval, the OCC may need certain approvals from its regulators (SEC and CFTC) to permit it to issue and clear these options.
Cboe is not the only exchange seeking to offer options. NYSE has also filed to list 'commodity-based trust shares,' while Nasdaq aims to list and trade options specifically on BlackRock's iShares Bitcoin Trust ETF. In its January filing, Nasdaq said that options would provide investors with a 'lower cost investing tool' and a hedging vehicle. BlackRock's IBIT has already amassed $10 billion in assets under management, while Grayscale's bitcoin ETF, converted from its bitcoin trust, has $26 billion in assets under management.
The SEC also announced on Wednesday that it was delaying decisions on proposed rule changes for all three exchanges, with the same late April decision date. Grayscale reaffirmed its support for the NYSE proposed rule change on Thursday, specifically requesting the SEC to approve options on its fund, GBTC. Grayscale argued that if investing in options for shares of products holding derivatives of an asset is acceptable, investing in options for shares of products holding the asset itself should be as well. The firm also urged the SEC to standardize a more consistent approach to approving options products on all identically-structured commodity ETFs listed and traded on national exchanges, regardless of whether they hold bitcoin.