In a statement released on Feb. 5, Michael Sonnenshein, CEO of Grayscale Investments, talked about the benefits of exchange-traded options for investors.
He emphasized how he had contributed to price discoveries and how investors better handle market conditions to reach specific goals.
Exchange-traded options are standard contracts that let people buy or sell a financial asset at a set price within a particular time. These options give traders much freedom; they can trade or protect themselves against how the prices of stocks, bonds, or the market will move without buying or selling the underlying commodity.
Regulatory Treatment for Bitcoin Investments
The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) regulate exchange-traded options in the United States. Furthermore, the Options Clearing Corporation (OCC) backs up the deals by giving the guarantees of the transactions.
As we look ahead, I think it’s never been more important for the #crypto and ETF communities alike to advocate for the development of a robust listed options market for spot #bitcoin ETFs. Although $GBTC has been in the public market since 2015, it was never accompanied by listed…
— Sonnenshein (@Sonnenshein) February 5, 2024
Sonnenshein talked about how the SEC approved the first Bitcoin futures ETF in October 2021 and how trading in listed options for the ETF started the next day.
He stated that commodity-based ETFs like spot Bitcoin ETFs don’t have the same streamlined process. Instead, they go through a longer review time, similar to the 19b-4 process that applies to ETFs.
Sonnenshein pointed out that the New York Stock Exchange (NYSE) and other exchanges have recently filed to change listing standards to include listed options for commodity-based ETFs. He did this to push for equal treatment of similar products.
He asserted that these changes should also apply to spot Bitcoin ETFs to ensure all financial assets are treated equally.
The SEC is currently reviewing applications for listed options on spot Bitcoin ETFs. BlackRock’s planned options with Cboe are still open for comments. Eric Balchunas, a Bloomberg ETF expert, said that the SEC’s decision could come out as early as February 15 or as late as September 2024.
The SEC has already acknowledged the 19b-4’s requesting the ability to trade options on spot #Bitcoin ETFs. This is faster than SEC typically moves. Options could be approved before end of February if SEC wants to move fast?…
AT ABSOLUTE EARLIEST options still ~27+ days away pic.twitter.com/ohbvHgP2uO
— James Seyffart (@JSeyff) January 19, 2024
Sonnenshein wants the crypto asset class and spot Bitcoin ETFs to be treated fairly. This is part of a larger movement for clear rules and equal opportunities in the financial markets.
