Grayscale Investments, a cryptocurrency asset management company, is calling on the U.S. Securities and Exchange Commission to approve options trading for a Bitcoin exchange-traded fund (ETF), which would open the door to a new class of investors. Grayscale CEO Michael Sonnenshein wrote a letter to the SEC for this. Sonnenshein stated that denying options trading for Grayscale Bitcoin Trust would be “unfair discrimination” against its shareholders. He also noted that regulators have previously approved ETF options on Bitcoin futures.
Grayscale seeks approval from the SEC for options trading!
Michael Sonnenshein emphasized that “being able to trade exchange-listed options on GBTC and other Bitcoin spot ETPs is critical for GBTC and all Bitcoin spot investors.” Bitcoin recorded monthly growth of over 47%, the largest monthly increase since December 2020. Spot Bitcoin ETF products played an important role in this. Because it gave more investors the opportunity to be introduced to cryptocurrency.
Meanwhile, asset management companies are capitalizing on this enthusiasm. It presents the SEC with a second wave of more complex cryptocurrency product offerings, including some that use options to increase Bitcoin volatility.
What will the approval process be like for spot Bitcoin ETF options?
Options give their holders the right to buy or sell assets at a predetermined price on a specific date. Regulatory approval for these new Bitcoin ETF product options is likely to take several months. The SEC is responsible for reviewing technical rule changes that exchanges must make to list options. Additionally, it usually approves them within a few days of the ETF starting trading.
By the way, it is worth noting that regulatory authorities consider Bitcoin as a commodity. Therefore, Bitcoin spot ETF options may also require approval from the Commodity Futures Trading Commission (CFTC), which regulates commodity derivatives. This makes the approval process even more complicated.
What is the benefit of spot Bitcoin ETF options?
Experts say that without options, large investors would face risk management problems. He also notes that this could prevent many people from participating. Analysts note that this could help transfer up to $100 billion into ETFs. Options will make price discovery easier for new ETF shares, Sonnenshein says. It also states that it will help investors navigate market conditions, hedge risk and generate income. In this context, Sonnenshein underlines the following points:
Options would also make Bitcoin even more regulated by allowing more regulated market participants, such as market makers and brokers, to trade the product.
Grayscale reduced its holdings by 2,223 BTC
cryptokoin.comAs you’ve been following from , Grayscale has been selling its Bitcoin holdings for some time. According to Lookonchain’s tracking, 8 ETFs increased their holdings by 14,934 BTC (about $940 million) today. However, Grayscale only reduced its holdings by 2,223 BTC (about $139.8 million). Among them:
- BlackRock increased holdings of 10,140 BTC (about $638 million);
- Fidelity increases holdings of 4,066 BTC (approximately $255.9 million).
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