SEC Postpones BlackRock and Bitwise Ethereum ETF Options Decision Until November

• The SEC has delayed its decision on Ethereum ETF options until after the U.S. Presidential election.
• Options trading on BlackRock’s BTC ETF was approved by the SEC on Sept. 20 2024.
• BlackRock dominates Bitcoin and Ethereum ETFs with over $22 billion in cumulative net inflows.

The U.S. Securities and Exchange Commission (SEC) has decided to delay its decision on proposals from Nasdaq to list and trade options on Ethereum ( ETH ) exchange-traded funds (ETFs).

Ethereum ETF Options

As per the SEC’s Thursday release, the regulator says it needs to “designate a longer period” to properly asses the rule change. Originally billed for Sept. 26, the decision is now expected on Nov. 10, 2024.

The delay has also trickled down to NYSE America LLC’s proposal to list and trade options on Ethereum ETFs from Bitwise and Grayscale. As per the SEC, the decision is to be expected by Nov. 11, 2024.

Interestingly, on Sept. 20, the SEC approved options trading for BlackRock’s Bitcoin ETF, the iShares Bitcoin Trust (IBIT). Presumably, the SEC will be closely observing volatility in cryptocurrency and ETH ETF markets, perhaps to time their decision

Options trading allows investors to buy/sell their assets at a predetermined price and is a common trading tool for market speculators. The move will provide greater variety and, therefore, exposure to institutional investors, which could be a draw for fresh capital.

Crypto ETFs Evolve

With options trading coming to IBIT , some experts, such as ETF Store’s Nate Geraci, believe that there’ll soon be a “flurry” of ETF filings, writing on X :

“Bitcoin buffer or defined outcome ETFs. Bitcoin premium income or yield max (covered call) ETFs. Bitcoin tail risk ETFs. Bitcoin convexity ETFs. All of it.“

The approval of Bitcoin ETF options trading will also bring in more liquidity, which is likely to have a snowball effect and draw in even bigger investors.

That said, market volatility may cause concern for wealthy whales, so having options trading available on spot crypto ETFs is equally attractive.

ETF Performance

These developments come at a time when Bitcoin ETF appetite may have already peaked, as inflow and outflow rates have been moving sideways since the early-doors rush through Jan/March this year.

As of Sept. 24, spot Bitcoin ETFs command $58.67 billion in Bitcoin, which is 4.62% of BTC’s market cap. Ethereum ETFs hold $7.2 billion, or 2.26 of ETH’s market cap.

On March 13, total net assets hit just over $60 billion. Following that, the lowest this figure has gone is $47.08 billion. However, since then, net assets have bounced between that and the $62 billion mark.

BlackRock’s IBIT is the leading ETF by net assets, with $22.96 billion. Unfortunately, Grayscale’s Bitcoin Trust (GBTC) is the only BTC ETF  in the red. It has suffered $20.11 billion in net outflows, reducing its net assets to $14.22 billion.

Similarly, Ethereum ETFs are dominated by Blackrock’s ETF, which has pulled in $1.1 billion in cumulative net inflows. Meanwhile, the Grayscale Ethereum Trust (ETHE) has seen $2.85 billion in exits.