The Securities and Exchange Commission has delayed a decision regarding a proposed rule change sought by NYSE American that would permit the listing and trading of options on spot bitcoin ETFs, an April 8 SEC notice said.
On Feb. 9, NYSE American, a subsidiary of Intercontinental Exchange, filed a proposed rule change with the SEC to permit the listing and trading of options on the Bitwise Bitcoin ETF, Grayscale Bitcoin Trust and any trust holding bitcoin, according to the notice.
“The commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change,” the notice said.
Accordingly, the SEC has designated May 29 as the date by which it “shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change,” the SEC said.
James Seyffart, an ETF research analyst at Bloomberg Intelligence, said the delay was “mostly expected at this point.” Ultimately, however, Seyffart said he believes options on spot bitcoin ETFs are likely to be approved.
“I personally think they will ultimately be approved because there is a lot of firepower behind them,” Seyffart said. “Namely, the issuers like BlackRock, Fidelity (Investments), Invesco and others.”
The SEC had received two comments on the proposed rule change, the notice noted said. In a February comment letter, Grayscale Investments CEO Michael Sonnenshein expressed support for the proposed rule change.
“Our argument is straightforward: If investing in options for shares of products holding derivatives of an asset is acceptable for investors, investing in options for shares of products holding the asset itself should be as well,” Sonnenshein said in the letter.
The SEC, having allowed the listing of options on bitcoin futures ETFs and having approved the listing of spot bitcoin exchange-traded products on NYSE Arca and other SEC-regulated national securities exchanges, “should approve the exchanges’ applications to list options on spot bitcoin exchange-traded products,” Sonnenshein’s letter said.
James J. Angel, an associate professor of finance at Georgetown University's McDonough School of Business, also submitted a comment letter.
“There is no reason for the SEC to delay approval of options on spot bitcoin ETFs,” Angel said in the March letter, which also asked the commission: “Don’t you have better things to do than waste time through extended navel-gazing on these rule filings?”
An NYSE American spokesperson declined to comment.
