Cryptocurrency

Grayscale CEO advocates for spot Bitcoin ETF options to gain approval

Grayscale CEO Michael Sonnenshein urged regulators to approve spot Bitcoin exchange-traded fund (ETF) options in a statement on Feb. 5.

Sonnenshein wrote in a post on X:

“… I think it’s never been more important … to advocate for the development of a robust listed options market for spot Bitcoin ETFs. Although GBTC has been in the public market since 2015, it was never accompanied by listed options, as they aren’t a feature of the OTC Market.”

Elsewhere, he said that similar products should be treated equally, writing:

“The same way bitcoin futures ETFs and spot bitcoin ETFs should (and now are) treated the same, so too should listed options on these products.”

He noted that the New York Stock Exchange (NYSE) and other national securities exchanges have recently submitted filings that would allow options trading on commodity-based ETFs like Grayscale’s own GBTC fund.

The SEC must now take those applications into consideration. Sonnenshein noted that although 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 the process for each underlying fund.

Sonnenshein called options “good for investors.” He said that options support price discovery, allow for better navigation of market conditions, and generate income. He noted that this applies to both retail investors and institutional investors alike.

SEC may decide on options before year end

The U.S. Securities and Exchange Commission is currently in the process of handling various spot Bitcoin ETF applications. The agency opened comments on BlackRock’s Nasdaq-listed fund and various Cboe BZX-listed funds on Jan. 19.

Bloomberg ETF analyst James Seyffart has suggested that a decision could occur between February and September 2024. Separate reports from Reuters suggest that a decision could occur as late as December 2024; that later date is in part due to the possibility that both the SEC and the Commodity Futures Trading Commission (CFTC) will need to grant approval.

The SEC otherwise approved various underlying spot Bitcoin ETFs on Jan. 10. Grayscale was one of several firms to gain approval at that time.

Grayscale’s GBTC ETF, converted from an existing fund, had $20.5 billion in assets under management (AUM) as of Feb. 2. This makes it the spot Bitcoin largest ETF at present, though it also experiences considerable outflows.

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