Cboe withdrew and resubmitted its application to list spot options. Bitcoin Bitcoin
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The exchange-traded fund (ETF) was trading late Thursday, suggesting the SEC may be weighing in on the process.
Earlier Thursday, Bloomberg Intelligence analyst James Seifert said he expects options on spot bitcoin ETFs to launch in Q4. “The final deadline for SEC decisions is ~September 21, but after that, there are still more steps from the OCC and CFTC,” Seifert wrote on X.
However, shortly afterwards, the Miami International Stock Exchange, MIAX PEARL, and BOX Exchange withdrew their applications to list spot Bitcoin ETF options, according to documents filed with the SEC.
“I wouldn’t read too much into it right now. I think the important exchange filings are the ones that listed the ETFs: Nasdaq, NYSE and CBOE,” Seyffart replied. “It’s weird, but just to be clear to anyone reading this, these are the three smaller exchanges that are leaving. The Big Dawgs (NYSE, Nasdaq, CBOE) still have active applications (and I think they’re likely to be approved later this year),” added Eric Balchunas, a fellow analyst at Bloomberg Intelligence.
After Cboe followed the three smaller exchanges, Seyffart said there was “definitely some movement” in options on a spot bitcoin ETF. “Cboe withdrew their application for options on a spot bitcoin ETF, which initially sounds like a bad thing… but then they resubmitted a completely new and updated application.”
Seyffart highlighted in the new filing that Cboe is proposing a rule change that would “allow exchanges to list and trade” options on units representing the interests in the Fidelity, Ark Invest/21Shares, Invesco, Franklin Templeton, VanEck, WisdomTree, Grayscale, Bitwise, BlackRock and Valkyrie spot bitcoin ETFs, designating them as “units deemed suitable for options trading on an exchange.”
The original application, filed in January, proposed a rule change that would allow exchanges to list and trade options on units representing interests in trusts that hold physical bitcoin ETFs, but did not specify which ETFs they would hold.
“The original submission was only 15 pages. This new submission is 44 pages, which is a lot more. I think the SEC likely gave some kind of feedback, which I think has to do with position limits and market manipulation concerns,” Seifert added.
Restart the clock
“Just as the SEC’s comments were a good sign for the odds of ETF approval, I think it’s a good sign here,” Balchunas said. “Why bother getting involved if they’re just going to reject it outright?”
But there’s no way to know for sure if the SEC is actually negotiating with Cboe about the filing, and there are downsides, Seyffart cautioned. “One downside here is that it restarts the clock. So the deadline will be pushed back to the end of April (around April 25). But if the SEC is negotiating — the deadline might not really matter. Time will tell,” he said.
“It’s hard to say when that will happen. We’re looking around right now and will update you as and when it’s appropriate,” Balchunas added.
“While regulators are deciding whether to allow options trading on spot bitcoin ETFs… here is a list of ETFs that we think would be OK with options,” ETF Store President Nate Geraci told Bloomberg Intelligence, providing a list of existing cryptocurrency derivatives ETFs with options, including bitcoin and ethereum futures, leveraged and inverse products. “Make it make sense,” he said.
On Wednesday, NYSE American proposed a rule change to list and trade options on Bitwise and Grayscale’s spot Ethereum ETFs.
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