SEC Delays Ethereum ETF Options Decision to April 2025

The U.S. Securities and Exchange Commission (SEC) has requested an extension to consider proposals for options tied to Ethereum (ETH) exchange-traded funds (ETFs), according to a regulatory filing on February 7. The SEC now has until April 2025 to reach a decision on the matter.

Nasdaq ISE had submitted a request in July 2024 for permission to list options contracts for BlackRock's iShares Ethereum Trust (ETHA). The proposed rule change would apply exclusively to options on ETHA, which is the only Ether ETF listed on Nasdaq's electronic exchange. Other Ether ETFs are listed on the New York Stock Exchange's Arca or Cboe.

The creation of an options market for ETH ETFs is seen as an important step towards wider adoption. Spot Ether ETFs were listed in July 2024 and have since attracted approximately $9 billion in net assets, according to data from The Block.

Options are financial contracts that grant the right, but not the obligation, to buy or sell an underlying asset at a specified price and time. The SEC is currently reviewing proposals for options on Ether ETFs.

In November 2024, options on spot Bitcoin (BTC) ETFs started trading. On the first day of listing, options contracts on BlackRock's iShares Bitcoin Trust ETF (IBIT) saw almost $2 billion in total exposure. The expansion of cryptocurrency ETF options in the U.S. is expected to accelerate institutional adoption and potentially unlock "extraordinary upside" for coin holders.

In September 2024, the SEC greenlighted Nasdaq's electronic securities exchange to list options on IBIT, marking the first time the agency approved options on spot BTC ETFs for U.S. trading. Later, in November, the Commodity Futures Trading Commission and the Options Clearing Corporation also greenlighted BTC ETF options, clearing the final hurdle for exchanges to list the financial derivatives products.

The U.S. President, who has expressed a desire to make the U.S. the "world's crypto capital," has appointed crypto-friendly leaders to head financial regulators. This has raised hopes within the industry for speedy approvals of proposed crypto financial products.