The U.S. Securities and Exchange Commission (SEC) has delayed its decision on proposals to allow Cboe Global Markets to list and trade options on Bitcoin ETFs.
Cboe Global Markets, a leading exchange firm, first applied to list and trade options on the newly launched Bitcoin ETFs in January. The SEC announced Wednesday that it will delay its decision on the proposed rule change until the end of April.
Options are financial instruments that can be used to hedge risk and allow an investor to enter into a contract in which he can buy or sell a financial product at a certain price within a certain time period.
Under normal circumstances, Cboe may offer options three days after an ETP begins trading on a national securities exchange, such as the Nasdaq or the New York Stock Exchange. However, these rules do not apply to ETPs with commodities such as Bitcoin.
In addition to the SEC approving Cboe's rule application, the Options Clearing Corporation (OCC) may need certain approvals from its regulators, including the SEC and the Commodity Futures Trading Commission (CFTC), to issue and clear these options.
Cboe isn't the only exchange looking to offer options. The New York Stock Exchange (NYSE) has also filed to list “commodity-backed trust shares.” Nasdaq, meanwhile, is looking to list and trade options specifically on BlackRock's iShares Bitcoin Trust ETF.
In its application in January, Nasdaq stated that options would offer investors a “lower cost investment tool” while also offering a hedging tool. BlackRock's iShares Bitcoin Trust ETF (IBIT) has amassed $10 billion in assets under management in its first few months, while Grayscale's BTC ETF, converted from a Bitcoin trust, has $26 billion in assets under management.
The SEC also announced Wednesday that it was delaying a decision on proposed rule changes, and all three rule change proposals now have the same late-April decision date.
*This is not investment advice.
