American regulators are again delaying a decision by 45 days on whether to allow options on spot bitcoin ETFs. 

The Securities and Exchange Commission published a notice Monday saying that it "designates May 29, 2024 as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove," allowing the New York Stock Exchange to start listing options on spot bitcoin ETFs.

Two spot bitcoin ETFs named specifically were Bitwise Bitcoin ETF and the Grayscale Bitcoin Trust, but the proposal also opened the door to "any trust that holds Bitcoin." 

The NYSE filed on Feb. 9, asking the SEC to let it trade options. As a self-regulatory agency (SRO), the NYSE had to first file for a rule change and allow public comment. The regulator had 45 days to allow comments and come up with a decision or else delay again for up to 45 days, which it has chosen to do.

Only two public comments were submitted: one from Grayscale CEO Michael Sonnenshein and another from Prof. James Angel of Georgetown University.

Angel started his 13-page letter with, "Dear SEC: Don’t you have better things to do than waste time through extended navel-gazing on these rule filings?" and proceeded to critique the regulator's handling of bitcoin ETFs and crypto in general. The Georgetown academic also noted that options exist on the ProShares Bitcoin Strategy (BITO) futures ETF and even the riskier leveraged 2x Bitcoin Strategy (BITX) bitcoin futures ETF.

Open interest on BITO options amounts to nearly 1.1 million contracts, according to data from OptionsCharts.io while BITX has 78,000 contracts in open interest. 

Opening the door to options trading on spot bitcoin ETFs could be a big deal for the NYSE. For comparison, the SPDR Gold Shares ETF, GLD, has 2.8 million options contracts in open interest, but it should be noted that the spot price of GLD shares is an order of magnitude higher than that of BITO's. 

Source : The Block Crypto News by Lawrence Lewitinn / Apr 9, 2024