The addition of options features to spot Bitcoin exchange-traded funds (ETFs) in the US is anticipated to occur in the fourth quarter, as indicated by Bloomberg ETF analyst James Seyffart. However, Seyffart also mentioned the possibility of this offering beginning as early as the third quarter, with the final decision deadline from the US Securities and Exchange Commission (SEC) set for around Sep. 21. While the SEC deadline falls in the third quarter, Seyffart emphasized the potential for a faster timeline, although he acknowledged that delays are common in such regulatory processes.
Seyffart highlighted that in addition to SEC approval, the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC) must also give their consent for the inclusion of options features in Bitcoin ETFs. The analyst referred to existing ETFs related to Bitcoin and Ethereum that already offer options, including leveraged products. Despite the recent withdrawal of applications from some exchanges to list spot Bitcoin ETF options, major entities like the New York Stock Exchange (NYSE), Nasdaq, and Chicago Board Options Exchange (CBOE) continue to pursue active applications in this space.
In a separate filing, Nasdaq and BlackRock submitted a request to expand the capabilities of the iShares Ethereum Trust (ETHA) by adding spot Ethereum ETFs to the asset manager’s offerings. The SEC is expected to provide comments within 21 days, with a final decision likely to be made around April 9, 2025. Nasdaq cited other commodity ETFs with listed options on its platform, such as BlackRock’s iShares COMEX Gold Trust and iShares Silver Trust, in support of the application.
Recent data indicates a shift in investor sentiment towards Bitcoin ETFs, with $45 million in inflows recorded on Aug. 7 following two consecutive days of outflows. Despite outflows from Grayscale’s GBTC totaling $30.7 million, BlackRock’s IBIT saw inflows of $52.5 million. Analyst Eric Balchunas expressed surprise at the level of inflows, considering the general expectation of continued outflows until Bitcoin ETFs had reduced their assets under management (AUM) by 2% to 3%. However, the actual reduction was only 0.5%, even amidst a 21% decline in Bitcoin prices on a weekly basis.
Overall, the evolving landscape of Bitcoin ETFs in the US presents a complex regulatory environment intertwined with shifting market dynamics and investor behavior. As the industry navigates through these challenges, the implementation of options features and the expansion of Ethereum ETF offerings signify a growing interest and demand for digital asset investment products in traditional financial markets.
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