NYSE American proposes options trading for Ethereum ETFs ETHE, ETH, and ETHW to offer flexible, cost-effective investment tools.
The SEC's review of NYSE's proposal follows Nasdaq's request for options on BlackRock's Ethereum ETF, ETHA.
Institutional interest in Ethereum remains high despite market volatility; SEC's decision on ETF options pending other regulatory approvals.
A rule change was submitted to the NYSE American LLC for allowing options trading of three Ethereum ETFs managed by Bitwise and Grayscale. The proposal will be on the Grayscale Ethereum Trust, Grayscale Ethereum Mini, and the Bitwise Ethereum ETF. This move is projected to help investors with an inexpensive tool in amassing more exposure to Ether (ETH) and offer a hedging mechanism.
https://twitter.com/NYSE/status/1821539106427375675 Response to Growing Demand
The proposal from the NYSE American is a reaction to the rising demand for investment instruments for Ethereum. An additional flexible means for investors to control their exposure to ETH may come through options trading on these ETFs.
Additionally, it might be an affordable way to protect against changes in the market. The NYSE American thinks that by providing a less expensive risk management tool, this modification will help investors.
Consequently, the SEC will review this proposal and is expected to submit comments within 21 days. NYSE American’s request mirrors Nasdaq’s August 6 proposal for options trading on the BlackRock iShares Ethereum Trust. Nasdaq’s request applies exclusively to the ETHA fund, currently the only Ethereum ETF listed on Nasdaq.
Moreover, even though spot Bitcoin ETFs were introduced earlier this year, the SEC has not yet approved options trading for them. Currently under management, the US Bitcoin ETFs have about $50 billion in assets. The cautious approach adopted towards bitcoin derivatives is highlighted by the SEC's delay in allowing options trading for these Bitcoin ETFs.
Future Outlook and Regulatory Process
Institutional interest in Ethereum remains robust despite recent market volatility. The spot Ethereum ETFs have seen strong inflows this week, indicating sustained demand. Hence, the SEC might consider approving additional derivative products for these crypto ETFs. Public comments on the NYSE and Nasdaq proposals are due within 21 days.
Furthermore, James Seyffart, an analyst for Bloomberg ETFs, believes that the SEC will decide on these ideas in full early next year. SEC approval, though, is only the first stage of the regulatory procedure.
https://twitter.com/JSeyff/status/1820916415227908108
Since Ethereum is categorized as a commodity, approval from additional organizations, like the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC), is also required.
The proposal by NYSE American to list options on Ethereum ETFs is a big step toward increasing the variety of investment instruments that are accessible for Ethereum. Market observers and investors will be keenly observing the SEC's ruling in this case.
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