The SEC’s decision has now been pushed back to November 10.
Regarding Nasdaq’s proposed rule change to allow options to be listed and traded on BlackRock’s iShares Ethereum Trust (ETHA), the U.S. Securities and Exchange Commission (SEC) has decided to delay its decision.
The SEC’s decision, which was first anticipated by September 26, has now been rescheduled for November 10.
In a Thursday press release, the agency said the delay allows it to assess the potential implications of such a move on market stability.
Spot Ether ETF Options to Bring Additional Liquidity to Market
Accepting proposals for a spot Ethereum exchange-traded fund (ETF) may help close the divide between traditional finance and digital assets.
Proponents contend that the introduction of these options would increase market liquidity and possibly spark bullish momentum.
The options would follow the same legal guidelines as other derivatives linked to ETFs if they were approved.
This would expand the array of investment options accessible to both retail and institutional investors by giving them new ways to speculate on or protect against Ethereum’s price fluctuations.
The proposal, which was filed on July 22, seeks to change the current regulations to allow trading of options on BlackRock’s iShares Ethereum Trust.
SEC delays decision on #Ethereum ETF options until Nov 10, following Bitcoin approval. 🛑💼
— BlockchainMaven (@Mavenchainblock) September 25, 2024
Biggest net outflows in $ETH $ETFs since July, with $79M withdrawn Monday. 🧐
Will the SEC’s final decision inject new liquidity or stall further? 🤔#Crypto #ETFs #ETH pic.twitter.com/luXBktxsco
The trust itself is intended to be a passive investment vehicle; it holds cash reserves held by The Bank of New York Mellon and Ethereum managed by Coinbase.
This trust, in contrast to other cryptocurrency funds, is solely focused on offering exposure to Ethereum’s price fluctuations and does not participate in staking or other proof-of-stake validation activities.
The SEC’s choice to postpone is not unprecedented.
The Securities Exchange Act’s Section 19(b)(2) gives the regulator the power to extend the review period by up to 90 days in order to fully assess the proposal’s possible risks and benefits.
The decision was made soon after BlackRock’s iShares Bitcoin Trust (IBIT) options trading was authorized by the SEC, subject to modifications made in response to concerns regarding market manipulation and excessive risk-taking.
The SEC has delayed its decision on NYSE American LLC’s separate proposal in addition to delaying its decision on BlackRock’s Ethereum options.
The proposal indicates that the regulatory body is closely examining every facet of Ethereum-related financial products. It entails listing and trading options on Bitwise’s Ethereum ETF, the Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust.
The Ethereum ETF market has experienced notable swings in tandem with the uncertainty surrounding the SEC’s ruling.
With more than $79 million in withdrawals, Ethereum ETFs saw their biggest net outflows since July on Monday.
With a $80.6 million one-day outflow, the largest since spot Ether ETFs were introduced earlier this year, Grayscale’s spot Ether ETF (ETHE) led the decline.
Spot Bitcoin ETFs See Inflows
Spot Bitcoin ETFs in the United States, however, have seen a different pattern, with net inflows hitting $135.95 million on Tuesday.
For the fourth day in a row, there were positive inflows; 12 funds amassed a total of more than $390 million during this time.
Leading the way was BlackRock’s IBIT, which attracted net inflows of $98.89 million, the most since August 26. Fidelity’s FBTC saw inflows of $16.80 million, while Bitwise’s BITB came in second with $17.41 million.
After sharp outflows on Monday, Ether ETFs saw a rebound on Tuesday, with $62.51 million in total daily inflows.
BlackRock’s ETHA led the recovery with net inflows of $59.25 million.
Additionally, two modest gains of $1.94 million and $1.32 million were reported for VanEck’s ETHV and Invesco’s Ether ETF, respectively.