SEC Approves Options Trading on Ethereum ETFs, Ethereum Price Jumps 14%

The US Securities and Exchange Commission (SEC) has approved the listing and trading of options on several spot Ethereum (ETH) exchange-traded funds (ETFs). This decision, announced on Wednesday, allows investors to trade options tied to BlackRock’s iShares Ethereum Trust (ETHA), bitwise Ethereum ETF, Grayscale’s Ethereum Trust, and Ethereum Mini Trust. Options are financial derivatives that provide the buyer with the right to purchase or sell the underlying asset, in this case, ETH, at a predetermined price within a specified date.

According to ETF analyst James Seyffart, the approval was widely anticipated, with the Commission having until April 9 to make a decision. The approval comes after the SEC initially delayed its decision on allowing options trading for spot ETH ETFs. Nasdaq ISE filed for the options on July 22, 2024, and following this filing, a letter from Better Markets cautioned the SEC about the high volatility associated with spot Bitcoin and Ethereum ETFs.

In October of the previous year, the SEC had approved options trading on 11 Bitcoin ETFs for NYSE American, Nasdaq, and Cboe Exchange. The recent approvals provide investors with a hedging tool to manage their Ether-related products and positions. The Commission noted that offering options on Ether Funds would benefit investors by providing them with an additional, relatively lower-cost investing tool to gain exposure to the price of Ether.

Following the SEC’s approval of options on ETH ETFs, the price of Ethereum spiked by 14% in the past 24 hours. At the time of reporting, Ethereum was trading at $1,641. This price surge coincides with a 90-day pause on Trump tariffs, which has also contributed to the positive market sentiment. However, ETH ETF holders have been experiencing increased losses, with the funds down over 50% year-to-date. This trend has affected ETH ETF flows, which have seen only four days of inflows since February 20.

Despite the overall downturn, two -2x ETH ETFs have emerged as the best-performing ETFs so far in 2025. These products represent a 2x leverage short positioning on ETH ETFs, indicating a significant shift in investor sentiment towards short positions in the Ethereum market. The approval of options on ETH ETFs is expected to pave the way for more launches from issuers, including covered call strategy ETH ETFs and buffer ETH ETFs, as seen with Bitcoin ETFs.