The Nasdaq International Securities Exchange has submitted a proposal to the Securities and Exchange Commission (SEC) to introduce options trading for a new trust managed by BlackRock, called the iShares Ethereum Trust. The trust's assets will consist solely of Ethereum, stored by Coinbase, and cash, held by The Bank of New York Mellon, as outlined in a filing on Tuesday.
Notably, the trust will not engage in Ethereum's proof-of-stake validation or utilize its assets for staking income, ensuring it remains a passive investment vehicle. The initiative aims to expand investment opportunities for Ethereum and make cryptocurrency investments more accessible within traditional financial markets, according to Nasdaq.
The filing explains that while the shares do not directly mirror an investment in Ethereum, they offer investors an alternative means of gaining exposure to Ethereum through the public securities market, which may be more familiar to them.
Nasdaq asserts that the proposed rule change will provide investors with a cost-effective way to access Ethereum and address their investment strategies, which often include hedging and speculation. Options are a popular tool among traders for managing risk or speculating on future price movements of assets, offering flexibility as traders can choose whether or not to execute the trade.
This proposal follows the SEC's recent approval of several cryptocurrency ETFs in the U.S., including the first spot Bitcoin ETFs earlier this year and multiple Ethereum ETFs in May 2024. This marks a significant shift, as the SEC had previously denied such crypto products for over half a decade.
If the proposal is approved, the options on the iShares Ethereum Trust will adhere to the same listing and trading rules as other ETFs, including regulations concerning underlying securities, expirations, strike prices, and trading halts. According to BlockBeats, Nasdaq and BlackRock, the world’s largest asset management firm, announced on August 7 their intention to introduce options for the spot Ethereum ETF and initiate trading. Documents released on the SEC website indicate that BlackRock and Nasdaq ISE, LLC have requested a rule change to list and trade options on the iShares Ethereum Trust, with the ticker symbol ETHA.
The document suggests that offering options on this trust fund could provide investors with a lower-cost tool for gaining exposure to spot Ethereum and serve as a hedging instrument for Ethereum-related investments and positions. The SEC has set a 21-day period for public comments on the proposal, with Bloomberg analyst James Seyffart indicating that a final decision could be made by early April 2025.
