There has been a recent bipartisan push to approve options on the spot Bitcoin ETPs amid the US SEC’s market stability concerns.
United States lawmakers are pressing the Securities and Exchange Commission (SEC) to approve options trading on Bitcoin exchange-traded products (ETPs). This move comes as lawmakers urge the SEC to stop discriminating against crypto funds. The bipartisan letter, signed by Representatives Mike Flood and Wiley Nickel, highlighted the need for the SEC to approve options on spot Bitcoin ETPs.
The letter also urged the US SEC to provide a clear explanation for the disparity in treatment between options for Bitcoin futures ETFs and options for spot Bitcoin ETPs.
Options are agreements giving buyers the right, yet not the obligation, to buy or sell an asset at a predetermined price and time. They’re often employed to hedge against price changes and reduce potential losses.
According to Flood and Nickel, the approval of options trading on Bitcoin ETPs is crucial for investors. The US SEC has been holding off applications from the New York Stock Exchange, Nasdaq, and Cboe Global Markets. They had submitted the applications in January.
These applications include Nasdaq’s plan to list and trade options on BlackRock‘s iShares Bitcoin Trust. Meanwhile, Cboe’s intends to offer options trading on various BTC funds. On the other hand, NYSE has plans to trade options on multiple spot Bitcoin ETFs.
The SEC has recently launched a new consultation round to consider the proposed rule change. It would subsequently allow trading options on crypto funds. In an April 24 filing, the SEC announced its intention to investigate how Bitcoin options could affect market stability.
The agency is also reviewing whether the current regulatory practices are adequate to manage the complexities of Bitcoin options. Meanwhile, interested parties can submit their initial comments by May 15, and rebuttals are due by May 29, 2024. Interested parties can submit their initial comments by May 15, and rebuttals are due by May 29, 2024.
Head to Millionero’s blog to read more news reports and blogs on crypto!