The American and Nasdaq International Securities Exchanges (ISE) of the New York Stock Exchange (NYSE) recently withdrew multiple proposals for rule modifications related to the listing of options on exchange-traded funds (ETFs) for Bitcoin (BTC) and Ether (ETH).
These withdrawals were formally recorded in regulatory filings following the market closing on August 14 and 15. This action is the most recent development about the ongoing conversations and regulatory actions about spot Bitcoin and Ethereum ETF options in the United States.
The exchange withdrew requests to permit the listing and trading of options on the Bitwise Bitcoin ETF, Grayscale Bitcoin Trust (BTC), and any other trust holding Bitcoin and Ether. These requests were part of an effort to expand the scope of investment products available to investors.
Similarly, Nasdaq ISE retracted its proposals to allow the listing and trading of options representing shares of Bitcoin and Ether trusts. This decision follows earlier efforts by Nasdaq to introduce crypto-related options products.
The withdrawals come after increased regulatory scrutiny and continuing SEC (Securities and Exchange Commission) assessments. Because regulating bitcoin assets is complicated, the SEC took a cautious approach when it asked for additional time to study the proposed rule changes in July.
On August 13, NYSE Arca also withdrew a request for a rule change aimed at paving the way for crypto ETF options. This move is part of a broader trend where exchanges are adjusting their strategies in response to regulatory feedback and market conditions.
Bloomberg Intelligence analyst James Seyffart suggests that the withdrawals might signal positive momentum toward regulatory approval for crypto ETF options, possibly influenced by SEC feedback.
At present, U.S. investors are allowed to trade options on ETFs that track Bitcoin’s performance through derivatives, but they cannot trade options on ETFs that hold Bitcoin directly.
Grayscale, the largest crypto fund issuer with around $25 billion in assets under management, has been advocating for a regulatory update to facilitate options on spot Bitcoin ETFs. Grayscale argues that if options on derivative-based products are acceptable, then options on ETFs holding the actual asset should also be permitted.
Also Read: NYSE American Withdraws Proposal for Bitcoin ETF Options
