Grayscale CEO Michael Sonnenshein has made a plea to regulators, urging them to approve spot Bitcoin exchange-traded fund (ETF) options. In a statement on Feb. 5, Sonnenshein emphasized the importance of advocating for the development of a robust listed options market for spot Bitcoin ETFs.
Sonnenshein argued that similar products, such as bitcoin futures ETFs and spot bitcoin ETFs, should be treated equally. He highlighted that listed options on these products should also receive the same treatment. Recently, the New York Stock Exchange (NYSE) and other national securities exchanges submitted filings to allow options trading on commodity-based ETFs like Grayscale’s own GBTC fund. The Securities and Exchange Commission (SEC) must now consider these applications.
Sonnenshein pointed out that while Bitcoin futures ETF options were quickly introduced through an automatic approval process, spot Bitcoin ETF options must go through a longer approval process similar to that of each underlying fund. He stressed that options are “good for investors” as they support price discovery, enable better navigation of market conditions, and generate income. These benefits apply to both retail and institutional investors.
The SEC is currently handling various spot Bitcoin ETF applications. In January, the agency opened comments on BlackRock’s Nasdaq-listed fund and various Cboe BZX-listed funds. Analysts have suggested that a decision on these applications could occur between February and September 2024. However, separate reports from Reuters indicate that a decision might be delayed until December 2024. This potential delay is partly due to the requirement for approval from both the SEC and the Commodity Futures Trading Commission (CFTC).
Grayscale was among the firms that gained approval for various underlying spot Bitcoin ETFs on Jan. 10. Its GBTC ETF, which was converted from an existing fund, currently holds $20.5 billion in assets under management (AUM) as of Feb. 2. This makes it the largest spot Bitcoin ETF in the market. However, the fund also experiences significant outflows.
Michael Sonnenshein’s call for the approval of spot Bitcoin ETF options highlights the need for a robust listed options market in the cryptocurrency industry. Treating similar products equally and recognizing the benefits of options for investors are essential steps in the development of this market. As the SEC continues to handle spot Bitcoin ETF applications, the decision on approving these options will have a significant impact on the future of cryptocurrency investment.