In a statement released on February 5th, Grayscale CEO Michael Sonnenshein emphasized the importance of regulators approving spot Bitcoin exchange-traded fund (ETF) options. Sonnenshein highlighted that although the Grayscale Bitcoin Trust (GBTC) has been available to the public since 2015, it currently lacks listed options, as they are not offered in the Over-The-Counter (OTC) market. To foster the development of a robust market for spot Bitcoin ETFs, Sonnenshein urged the approval of options for these products.
Sonnenshein further emphasized the need for equal treatment of similar products. Referring to the recent approval of bitcoin futures ETFs and spot bitcoin ETFs being treated the same, he argued that listed options on these products should also be handled similarly. Sonnenshein revealed that the New York Stock Exchange and other national securities exchanges have submitted filings seeking approval for options trading on commodity-based ETFs, such as Grayscale’s GBTC fund. The Securities and Exchange Commission (SEC) must now consider these applications.
Unlike the automatic approval process for Bitcoin futures ETF options, Sonnenshein pointed out that spot Bitcoin ETF options face a lengthier approval process similar to the process for underlying funds. Nevertheless, he emphasized that options are beneficial for investors. They support price discovery, assist in navigating market conditions, and generate income. These advantages apply to both retail and institutional investors alike.
The SEC is currently handling various spot Bitcoin ETF applications. The agency began accepting comments on BlackRock’s Nasdaq-listed fund and various Cboe BZX-listed funds on January 19th. Bloomberg ETF analyst James Seyffart has suggested that a decision could be made between February and September 2024. However, separate reports from Reuters propose that the decision might be postponed until December 2024 due to the potential need for approval from both the SEC and the Commodity Futures Trading Commission (CFTC). Nonetheless, underlying spot Bitcoin ETFs were approved by the SEC on January 10th, with Grayscale being one of the firms that received approval. As of February 2nd, Grayscale’s GBTC ETF, converted from an existing fund, managed $20.5 billion in assets. It currently stands as the largest spot Bitcoin ETF, despite experiencing significant outflows.
The introduction of spot Bitcoin ETF options is crucial for the growth of the cryptocurrency market. Grayscale CEO Michael Sonnenshein’s advocacy for the approval of options on these products highlights their potential benefits for investors. As regulators consider various spot Bitcoin ETF applications, it remains to be seen how quickly the market will develop and what impact these options will have on price discovery and market navigation. Nonetheless, the approval of spot Bitcoin ETF options is a significant step toward further institutional adoption of cryptocurrencies and the maturation of the digital asset market.
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