SEC Delays Decision on BlackRock’s iShares Ethereum Trust Options
Table of contents
Impact on Crypto Market Integration
If approved, the Ethereum options could further solidify cryptocurrency’s role in traditional financial markets. Some analysts believe that adding options trading for crypto ETFs would introduce new liquidity into the market, potentially triggering bullish momentum. Investors would gain additional tools to hedge or speculate on Ethereum price movements under the same regulatory framework as other ETF-linked derivatives.
Proposal Under Review
The proposed rule change, submitted in July 2023, aims to amend existing regulations to permit the listing of options for BlackRock’s iShares Ethereum Trust. This passive investment vehicle holds Ethereum, managed by Coinbase, and cash reserves handled by The Bank of New York Mellon. Unlike other cryptocurrency products, the trust does not engage in staking or proof-of-stake validation activities.
The SEC is using the full extent of its regulatory power, under Section 19(b)(2) of the Securities Exchange Act, to delay the decision by up to 90 days, ensuring thorough evaluation of risks and market stability.
Market Reactions and Outflows
Meanwhile, Ethereum ETFs are experiencing volatility. Grayscale’s spot Ether ETF (ETHE) recorded a significant outflow of $80.6 million, marking the largest single-day withdrawal since its launch earlier this year. This mass exodus follows a recent SEC approval allowing options trading on BlackRock’s iShares Bitcoin Trust (IBIT), which faced similar regulatory hurdles.