Grayscale is pressuring the SEC, seeking approval for Bitcoin spot ETF option...

Jafar224

On February 29th, according to Reuters, cryptocurrency asset management company Grayscale Investments is urging the U.S. Securities and Exchange Commission (SEC) to approve options trading for its Bitcoin spot exchange-traded fund (ETF), opening doors for a new class of investors.

In a letter addressed to the SEC on Wednesday, Grayscale CEO Michael Sonnenshein stated that denying options trading for Grayscale Bitcoin Trust (GBTC.P) would "unfairly discriminate" against its shareholders. He pointed out that regulatory authorities had previously approved ETF options related to Bitcoin futures.

Sonnenshein emphasized, "For GBTC and all Bitcoin spot [exchange-traded product] investors, having exchange-listed options on GBTC and other Bitcoin spot ETPs is crucial." Bitcoin is experiencing a monthly growth exceeding 47%, the largest monthly increase since December 2020. The opening of ETFs introduces cryptocurrency to more investors, and asset management companies are seizing this momentum, submitting a second wave of more complex cryptocurrency product proposals to the SEC, some of which will use options to amplify Bitcoin volatility.

Options grant holders the right to buy or sell assets (such as stocks or exchange-traded products) at predetermined prices before a specified date. Regulatory approval for these new Bitcoin ETF product options may take several months. The SEC is responsible for reviewing technical rule changes that exchanges must make to list options, typically approving them a few days after the ETF starts trading. However, as regulators consider Bitcoin a commodity, options for Bitcoin spot ETFs may also require approval from the Commodity Futures Trading Commission (CFTC), which oversees commodity derivatives, adding complexity to the approval process.

Experts suggest that without options, large investors face risk management issues that may hinder widespread participation. Analysts have indicated that this could help drive up to $100 billion in funds into ETFs. Sonnenshein stated that options would facilitate price discovery for new ETF shares, assist investors in navigating market conditions, hedging, and generating income. Options would also "further bring Bitcoin into the regulatory fold by allowing more regulated market participants, such as futures commission merchants and brokers, to trade the product."

Isha000

I don't know if it can be ultimately approved.

Sona59

This transaction is also something worth considering, isn't it?