Cboe Global Markets has re-submitted its application to list Bitcoin ETF options, signaling a potential engagement by the U.S. Securities and Exchange Commission (SEC) in the process. This move comes after Cboe, along with three smaller exchanges, initially withdrew their applications late Thursday, raising questions about the regulatory landscape for Bitcoin ETF options.
The re-filing by Cboe is seen as a significant development in the ongoing efforts to introduce Bitcoin ETF options to the market. The SEC has been cautious in its approach to approving such financial instruments, citing concerns related to market manipulation and investor protection. However, the latest move by Cboe indicates that there may be progress behind the scenes.
Bitcoin ETF Options: Industry Experts See Hope in SEC Engagement Despite Delays
Earlier in the day, Bloomberg Intelligence analyst James Seyffart had predicted that Bitcoin ETF options might become available as soon as the fourth quarter of this year. On his account on X, he noted that the final deadline for the SEC’s decision is around September 21st, though further steps would be required from the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC) before any options could be officially listed.
Despite Seyffart’s optimistic outlook, the market was caught off guard when the Miami International Securities Exchange (MIAX PEARL) and BOX Exchange, along with Cboe, withdrew their applications, according to filings with the SEC. This led to speculation about the reasons behind the withdrawals and what it could mean for the future of Bitcoin ETF options.
James Seyffart and fellow Bloomberg analyst Eric Balchunas quickly weighed in on the situation. Balchunas pointed out that the exchanges that withdrew their applications were relatively small players in the market. He emphasized that the larger exchanges, namely Nasdaq, NYSE, and Cboe, still have active applications, which he believes have a strong chance of being approved later this year.
Shortly after these comments, Cboe re-filed its application, leading to further analysis by Seyffart. He noted that the new filing includes a proposal for a rule change that would allow the exchange to list and trade Bitcoin ETF options for several major funds. These funds include those managed by Fidelity, Ark Invest/21Shares, Invesco, Franklin Templeton, VanEck, WisdomTree, Grayscale, Bitwise, BlackRock, and Valkyrie. The proposal suggests that these ETFs could be considered suitable for options trading, providing a clearer path forward for the listing of Bitcoin ETF options.
“The original filing was only 15 pages. This new one has a lot more meat to it at 44 pages. To me it means that the SEC likely gave some sort of feedback? Which looks like it was related to position limits and market manipulation concerns,” Seyffart added.
Eric Balchunas offered his perspective on the situation, describing the SEC’s potential feedback as a positive sign. He argued that if the SEC were inclined to deny the application outright, they would not have engaged with Cboe at all. This interaction, according to Balchunas, increases the likelihood that Bitcoin ETF options could be approved in the near future.
However, Seyffart also pointed out a possible downside to the re-filing. He speculated that the process might have restarted the clock, meaning that the deadline for the SEC’s decision could be pushed back to late April of next year. Despite this potential delay, Seyffart suggested that if the SEC is indeed engaging with Cboe, the exact timing of the decision might not be as critical. The situation remains fluid, and analysts are closely monitoring developments.
While the SEC deliberates, industry experts like Nate Geraci, President of The ETF Store, have highlighted the existing options on crypto derivatives ETFs that have already been approved. These include products related to Bitcoin and Ethereum futures, as well as leveraged and inverse ETFs. Geraci questioned the logic behind allowing these options while still delaying approval for Bitcoin ETF options.
“While regulators decide whether it’s ok for you to trade options on spot Bitcoin ETFs… Here’s a list of ETFs they’ve deemed ok for options to exist,” The ETF Store President Nate Geraci noted, pointing to Bloomberg Intelligence’s list of existing crypto derivatives ETFs with options, including Bitcoin and Ethereum Futures, leveraged and inverse products.
Conclusion: A Positive Sign for Bitcoin ETF Options?
The re-filing by Cboe for Bitcoin ETF options could be a positive indicator that the SEC is engaging with the market on this issue. While there are still many uncertainties, including the potential for further delays, the fact that exchanges are continuing to push for approval suggests that there is optimism within the industry. As the process unfolds, investors and analysts alike will be watching closely to see if Bitcoin ETF options finally make their way to the market, potentially opening up new opportunities for traders and investors.
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